Feb 17, 2023
SEC Charges Terraform Labs with $Multi-Billion Crypto Fraud
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Terraform Labs and its founder Do Kwon for allegedly engaging in a multi-billion dollar crypto asset securities fraud.
The SEC’s Feb. 16 statement accused Kwon and Terraform of offering and selling an “inter-connected suite of crypto asset securities, many in unregistered transactions.” This includes the now collapsed algorithmic stablecoin, TerraClassicUSD (USTC), and its connected cryptocurrency Terra Luna Classic (LUNC).
The SEC also took issue with mAssets, crypto derivatives that mirror the stock price of publicly listed companies, and Terraform’s issuance of Mirror (MIR), a governance token for the Mirror protocol which lists mAssets.
SEC Chair Gary Gensler stated that Kwon and Terraform “failed to provide the public with full, fair, and truthful disclosure” regarding USTC and LUNC — formerly named Terra (LUNA) and TerraUSD (UST). He added that they had also “committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.”
The SEC filed its complaint in the U.S. District Court for the Southern District of New York with charges relating to violations of the registration and anti-fraud provisions of the Securities Act and the Exchange Act.
Gensler praised the SEC’s staff for their investigation and alleged that the defendants had attempted to prevent the SEC from obtaining important information about their business.
“This case demonstrates the lengths to which some crypto firms will go to avoid complying with the securities laws,” he said.
The SEC’s legal action has highlighted the importance of conducting due diligence when investing in crypto assets. Investors should always ensure that the organizations they are investing in are doing the right thing and are compliant with the relevant regulations.
In addition, investors should be aware of the risks involved in investing in crypto assets. Crypto markets can be volatile and prices can fluctuate significantly. It is therefore important to understand the potential risks and rewards associated with investing in crypto assets.
Finally, investors should be aware of the potential for fraud in the crypto space. Fraudulent organizations may be selling unregistered securities or making false or misleading statements in order to entice investors. It is therefore important to be vigilant and to do your research before investing in any crypto asset.
This is a developing story, and further information will be added as it becomes available.
Disclaimer: All investment or financial opinions expressed by MoonLanding Media are not recommendations and are intended for entertainment purposes only. Do your own research prior to making any kind of investment. This article has been generated based on trending topics, has not been fact checked and may contain incorrect information. Please verify all information before relying on it.
