SEC Expands Investigation into Terraform; Do Kwon would have withdrawn USD $80M from LUNA and UST every month – DiarioBitcoin

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SEC Expands Investigation into Terraform; Do Kwon would have withdrawn USD $80M from LUNA and UST every month - DiarioBitcoin By Hannah Perez

US regulators are investigating whether Terraform Labs violated the investor protection with UST marketing.


  • The SEC was already investigating Terra for its Mirror protocol.
  • The regulator expands its efforts in the wake of the collapse of UST.
  • Kwon allegedly funneled $80 million from Terra into his own wallet every month.

legal problems for Terraform Labs and its founder Do Kwon continue to grow.

According to a report from Bloombergthe United States Securities and Exchange Commission (SEC) is expanding its investigation to the company behind the ecosystem land to learn more about their business practices. The news comes after the implosion of the stablecoin TerraUSD (UST) last month, and developments in another regulator investigation related to earth.

The publication, which cited sources close to the matter, revealed that the SEC Enforcement Division is investigating whether Terraform Labs violated investor protection rules through the trading of the tokens MOON and UST.

SEC investigates Terraform for UST collapse

The federal agency has been investigating terraform and its CEO, Do Kwon, since the end of last year in relation to the alleged illegal sale of unregistered securities through the protocol Mirror. This investigation seeks to know if the company violated the federal securities law when it marketed tokens that represent synthetic actions through that platform.

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Kwon and his company balked at the SEC subpoenas and filed a lawsuit, alleging, among other things, that the SEC did not have jurisdiction over terraform, based in Singapore. However, this week, a US court ruled in favor of regulators, ordering the director and his company to comply with SEC subpoenas. They are now required to collaborate with the agency by providing testimony and documents on the operation of MirrorProtocol.

Reports suggest that the SEC is expanding efforts around landalthough this time to learn more about the operation of the company after the historic collapse of UST.

Last month, UST, which was expected to maintain a stable price of USD $1, delinked, wreaking havoc on LUNA. Both tokens completely lost their value. terraform tried to relaunch his project, leaving behind the stablecoin failed, creating a new token and renaming the original to Moon Classic (MON).

Today’s report suggests that one of the cornerstones of the new line of investigation of the SEC is to find out if Terraform Labs may have breached investor protection provisions by falsely trading UST as a stablecoin reliably pegged 1:1 to the US dollar.

Kwon would have sent USD $80 million every month

Bloomberg was not the only news outlet to report on the SEC’s latest efforts against Earth. The South Korean newspaper JTBC He also reported that the US Commission has launched an investigation into the allegations of collapse.

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The US Securities and Exchange Commission recently conducted a remote video survey of some of Terra’s key designers and focused on asking about Terra’s poor design structure“, reads the report, quoted by Ship.

That medium also added that the The SEC has allegedly discovered that Do Kwon had been funneling close to $80 million of security funds. terraform monthly before the crash of UST and LUNA. The report, which claims to collect quotes from US regulatory agency officials, said that “funds flowed into dozens of cryptocurrency wallets” owned by Kwon.

The irregular movements of funds have raised the SEC’s suspicions of money laundering by Terraform Labs, according to the report. It is worth noting that JTBC did not identify the sources or provide any evidence regarding his alleged information on the SEC investigation, as noted Crypto Briefing.

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Article by Hannah Estefanía Pérez / DailyBitcoin

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WARNING: This is an informative article. DiarioBitcoin is a means of communication, it does not promote, endorse or recommend any investment in particular. It is worth noting that investments in crypto assets are not regulated in some countries. May not be suitable for retail investors as the full amount invested could be lost. Check the laws of your country before investing.

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