The U.S. Securities and Exchange Commission (SEC) has secured approval to collaborate with South Korea in its probe against Terraform Labs and its co-founders, Daniel Shin and Do Kwon. This decision, sanctioned by District Judge Jed Rakoff on August 16, allows the SEC to question Shin and access documents from Chai Corporation, a Seoul-based payments provider he founded.
Shin and Kwon co-founded Chai in 2019, initially operating closely with Terraform. By 2020, the companies had diverged. The SEC’s investigation focuses on Chai’s use of the Terra blockchain and its relationship statements with Terraform. The reasons behind Chai’s separation from Terraform are also under scrutiny.
While Terraform Labs and Kwon didn’t oppose the SEC’s motion, they presented their own queries and have previously refuted the SEC’s claims. Accusations suggest that they falsely stated Chai’s use of the Terra blockchain for transactions.
In May 2022, the Terra cryptocurrency ecosystem experienced a staggering $40 billion loss, causing its token, LUNA, to plummet nearly to zero and triggering a broader market crash. Subsequently, the LUNA token split into two distinct entities: LUNA and LUNA Classic (LUNC). South Korean prosecutors have since charged Shin with fraud, accusing him of hiding the risks associated with investing in Terraform’s cryptocurrency.
On February 16, 2023, the U.S. Securities and Exchange Commission (SEC) charged Singapore-based Terraform Labs and its CEO, Do Hyeong Kwon, with conducting a multi-billion dollar crypto fraud from April 2018 to May 2022. The scheme involved various unregistered crypto asset securities, including “mAssets” and the Terra USD (UST) stablecoin. The SEC alleges that Terraform and Kwon falsely marketed these assets, promising high returns and misleading investors about their stability and usage. In May 2022, the value of these tokens crashed. The SEC emphasizes the importance of transparency and adherence to securities laws in the crypto sector.
Kwon is currently jailed in Montenegro for trying to exit using a fake Costa Rican passport, resulting in a three-month sentence. He faces investigations in both the U.S. and South Korea, beyond the SEC’s complaint.
Image source: Shutterstock
Cryptocurrency market has experienced a notable surge – London Business News
Charles Hoskinson Signals Alert of Legacy Finance’s Creeping Influence in Crypto
Hong Kong finance manager loses HK$17.8 million after investing in gold and cryptocurrency via sham platform
Ethereum Shanghai Upgrade: What you need to know
Nissan files 4 new web3 trademarks, trials sales in the metaverse
Why is Ethereum (ETH) price down today?
News from Twitter:
Cryptocurrencies News24 hours ago
Turkish cryptocurrency regulations: Beyond security, embracing sovereignty
Cryptocurrencies News21 hours ago
Really Now? Bitcoin Will Hit $100,000 This June 2024, Finance Guru Predicts
Cryptocurrencies News22 hours ago
Ether Hits $3K for First Time in Nearly 2 Years Amid Rising ETH ETF Excitement