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Do Kwon, Jailed Crypto CEO, Rejects SEC Fraud Allegations
The world of cryptocurrency has been in the spotlight recently due to the allegations of fraud and collapse of TerraUSD and Luna cryptocurrencies. The CEO of Terraform Labs, Do Kwon, has been accused of fraud by the Securities and Exchange Commission (SEC). In this article, we will discuss the allegations against Kwon, his defense, and what this could mean for the cryptocurrency industry.
Background
In 2020, Terraform Labs launched TerraUSD, a stablecoin designed to maintain its value against the US dollar. TerraUSD was backed by a basket of cryptocurrencies and other assets. Terraform Labs raised over $40 billion in funds from investors globally. In June 2021, the value of TerraUSD and Luna plummeted, resulting in a significant loss for investors.
The SEC filed a lawsuit against Kwon and Terraform Labs, alleging that they had defrauded US investors. The lawsuit claims that Kwon and his team had misled investors about the assets backing TerraUSD and Luna. The SEC alleges that Kwon and his team did not disclose that the majority of assets backing the stablecoins were held in risky investments such as speculative assets, high-yield bonds, and cryptocurrency loans.
