SEC charges Terraform Labs and Do Kwon with orchestrating multibillion-dollar crypto asset securities fraud

The U.S. Securities and Exchange Commission (SEC) filed a lawsuit in the U.S. District Court for the Southern District of New York alleging that Singapore-based Terraform Labs PTE Ltd and Do Hyeong Kwon orchestrated a multibillion-dollar crypto-asset securities fraud involving algorithmic stablecoins and other crypto-assets securities, in violation of the registration and anti-fraud provisions of the Securities Act and the Exchange Act. According to the SEC complaint, from April 2018 until the scheme collapsed in May 2022, Terraform and Do Kwon raised billions of dollars from investors by offering and selling a set of interrelated crypto asset securities, many of them in Among the unregistered transactions were securities-based swaps mAssets and crypto-securities Terra USD (UST), known as an algorithmic stablecoin. The complaint further alleges that Terraform and Kwon offered and sold investors other ways to invest in their “cryptocurrency empire,” including the cryptoasset security token MIR (or Mirror token) and LUNA itself. Terraform and Kwon marketed crypto-asset securities to investors, repeatedly claiming that the tokens would increase in value.