Lawyers representing the founder of the infamous Terra project, Do Kwon, have denied allegations of fraud. They stated that the US Securities and Exchange Commission (SEC) was unable to provide proof of the deception of US investors.
Yesterday, April 21, Do Kwon’s lawyers asked the judge to dismiss the SEC’s lawsuit, saying that the regulator’s claims were unfounded. They argued that U.S. law prohibits regulators from “using federal securities law to assert jurisdiction over digital assets in this case,” reports Bloomberg.
In addition to the SEC allegations, Do Kwon has other issues as well. Recently, the Prosecutor’s Office of Montenegro accused the founder of Terraform Labs of making and using a fake passport and other identification documents. This could prevent Kwon from being extradited to the US.
At the end of March, Do Kwon was arrested in Montenegro. Kwon was stopped at the airport in Podgorica (the capital of Montenegro) with forged documents. Montenegro borders Serbia, where the former crypto mogul has been hiding since December last year.
Before that, he lived in Singapore, but in September 2022 he was forced to move to a safer place, as South Korean authorities issued an arrest warrant for the co-founder of Terra.
In February of this year, the US Securities and Exchange Commission (SEC) filed charges against Do Kwon and Terraform Labs for organizing a major securities fraud.
“We contend that Terraform and Do Kwon have failed to provide the public with full, fair and truthful disclosures as required for a variety of crypto asset securities, most notably LUNA and Terra USD. We also allege that they committed fraud by repeating false and misleading statements to build trust before hurting investors,” explained SEC Chairman Gary Gensler.
The collapse of Terra
Prices of UST and LUNA began their fall on May 10 last year. The algorithmic stablecoin UST lost its peg to the dollar and went into free fall. Following, with a slight delay, but also dramatically, the LUNA cryptocurrency collapsed, with the help of which the leaders tried to save the stablecoin.
The results were terrible – UST fell from $0.9 to $0.002. And the LUNA token fell by 99%. Together with them, for the company, bitcoin collapsed, pulling the rest of the cryptocurrency market with it. 200,000 wallets of the Terra ecosystem turned into a pumpkin. In addition, many projects on the Terra blockchain were also destroyed.
Investors lost huge amounts of money, and Do Kwon became a household name.
▼
The most interesting and important news on our channel in Telegram
