Terraform Labs, founder Do Kwon transferred over 10,000 Bitcoin out of project

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Terraform Labs, founder Do Kwon transferred over 10,000 Bitcoin out of project

Terraform Labs founder Do Kwon [SCREEN CAPTURE]

Terraform Labs founder Do Kwon [SCREEN CAPTURE]

Terraform Labs and its founder Do Kwon transferred more than 10,000 Bitcoin out of the project and moved some of the tokens into a Swiss bank account, according to a Bloomberg report Friday.  
 
The allegations were made in a lawsuit by the U.S. Securities Exchange Commission (SEC), which accused Kwon, 31, and the company of fraud that is estimated to have cost investors more than $40 billion, according to the financial regulator.

 
“We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for Luna and TerraUSD,” reads the allegation released Thursday.

 
It charged Kwon and Terraform Labs “with orchestrating a multi-billion dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities.”

 
Kwon and his company raised billions of dollars from investors by offering and selling an inter-connected suite of crypto asset securities, many in unregistered transactions.  
 
"Today’s action not only holds the defendants accountable for their roles in Terra’s collapse, which devastated both retail and institutional investors and sent shock waves through the crypto markets, but once again highlights that we look to the economic realities of an offering, not the labels put on it," said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. 
 
"As alleged in our complaint, the Terraform ecosystem was neither decentralized, nor finance. It was simply a fraud propped up by a so-called algorithmic 'stablecoin' — the price of which was controlled by the defendants, not any code."

 
Kwon was reported to be hiding in Serbia in December.  
 
In September, Interpol issued a red notice for Kwon, a request to law enforcement worldwide to locate and provisionally arrest a person pending extradition or surrender.  
 
TerraUSD and Luna crypto crashed last May, shaking the crypto industry. Luna was once a major coin that ranked within the top 10 market capitalization.  
 



BY JIN MIN-JI [jin.minji@joongang.co.kr]
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