SEC charges Terraform Labs over alleged 'multi-biillion dollar' crypto fraud
pegged to the US dollar, with high yields . The firm also fooled people by claiming its Luna token would gain value thanks to a Korean mobile payment app that used the Terra blockchain to settle transactions.
Terraform and Do Kwon didn't provide"full, fair and truthful disclosure" for their crypto asset securities, SEC chair Gary Gensler says. The charges include registration and anti-fraud violations of the Securities Act and Exchange Act. TerraUSD and Luna lost their peg to the US dollar in May 2022, with the prices of both plunging to near-zero. Investors lodged complaints accusing Terraform and Kwon of running a Ponzi scheme, and the freefall contributed to the collapse of the crypto hedge fund Three Arrows Capital. The crypto exchange Binance quickly faced a lawsuit over claims it incorrectly marketed TerraUSD as a safe asset.
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