Do Kwon and TerraForm Labs (TFL) have been officially accused of scamming unsuspecting cryptocurrency investors by the U.S. SEC.
The Securities and Exchange Commission has filed charges against TerraForm Labs (TFL) and its founder, Do Kwon, for allegedly defrauding investors in a multi-billion dollar cryptocurrency scheme.
According to the SEC, Kwon and his business raised billions of dollars from unwary investors between April 2018 and May 2022 by marketing unregistered securities.
Terra (LUNA), Terra USD (UST), and Mirror token (MIR) are unregistered securities, according to the U.S. SEC.
SEC Allegations Against Do Kwon and TFL
Notably, the SEC also claimed that the defendants promoted these unregistered securities to unsuspecting investors by promising them that the value of the tokens would soar dramatically in the future.
The defendants allegedly failed to give the public the fair and honest disclosure “required for a host of crypto asset securities,” according to Gary Gensler, head of the SEC.
“We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.” Gensler continued.
Director of the SEC’s Division of Enforcement Gubir S. Grewal commented on the news, saying that the move is intended to hold the defendants responsible for the collapse of the Terra ecosystem, which sent shockwaves through the global cryptocurrency market.
Kwon’s Current Address is Still Unknown
It’s important to note that the SEC omitted to include Kwon’s current address.
Remember that Kwon was believed to be residing in Singapore when Korean authorities issued an arrest warrant for him last year.
However, the creator of TFL was not present, according to Singaporean authorities.
According to recent reports, Korean police have been unsuccessfully searching for Terra’s founder in Serbia, and Kwon’s current address is still a mystery as of publication.
The accusations follow news that the SEC was investigating whether Kwon and TFL had broken American securities laws by selling USTC and LUNC.
Notably, Kwon is also charged with securities offenses in South Korea.
The company has maintained that Kwon and TFL did not break any securities laws, despite claims made by the U.S. SEC and South Korean authorities that they marketed unregistered securities.