Terraform Labs and its founder Do Kwon were charged by the US Securities and Exchange Commission (SEC) of defrauding investors in a massive cryptocurrency scheme, Reuters reported, citing a federal court filing.
Kwon was the primary developer of TerraUSD (UST) and its sister coin Luna, which crashed in value last year and caused turbulence in crypto markets across the world.
The market collapse led to the failure of several major crypto companies, including Celsius Network and Three Arrows Capital. The estimated total loss for investors in TerraUSD and Luna was around US$42 billion.
The SEC alleges that Kwon raised billions of dollars from investors through the sale of digital assets.
One of the tokens was algorithmic stablecoin UST – it was supposed to keep a 1:1 peg to the US dollar, but it lost nearly all of its value in May 2022. The SEC asserts that Terraform Labs and Kwon misled investors on UST’s sustainability and the potential increase in value of the company’s crypto tokens.
See also: UST, lies, and Hodlnaut: How a rising star fell back to earth
Editing by Dhania Putri Sarahtika
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