Arslan ButtThe Securities and Exchange Commission (SEC) filed a fraud complaint against Terraform Labs and its CEO, Do Kwon, alleging their involvement in a multibillion-dollar cryptocurrency asset securities fraud. The complaint claimed that Kwon and Terraform collaborated with an undisclosed US trading company to restore the peg of UST, a stablecoin.
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The SEC's complaint against Do Kwon and Terraform Labs for the #LUNA crash is a wild ride
I have gone through the entire 55-page document
To do THESE things, you need to have no moral compass
Below are the wildest parts
— jacksage.eth (@jacksage_NFT) February 18, 2023
According to individuals familiar with the trades, Jump Trading is the undisclosed “US trading firm” that the SEC accused of aiding the TerraUSD stablecoin when it disconnected from the dollar in 2021.
SEC Sues Terraform Labs and Do Kwon for Multibillion-Dollar Cryptocurrency Fraud
On February 16th, the US Securities and Exchange Commission (SEC) filed a complaint in the US District Court for the Southern District of New York, alleging that Do Kwon and his company Terraform Labs violated the Securities Act and the Exchange Act’s registration and anti-fraud regulations.
In a complaint filed by the SEC, a cryptocurrency developer and his company have been accused of engaging in a multibillion-dollar securities fraud scheme. The SEC claimed that the defendants repeatedly marketed crypto asset securities to investors seeking profits, falsely stating that the tokens would appreciate.
SEC Sues Terraform Labs and Do Kwon for Deceiving Investors – Here's What Happened – https://t.co/R7uuZIaeWS#Crypto #CryptoNews #CryptoTrends #NFT #NFTNews #NFTRelease #NFTDrop #AltCoin #AirDrop #NFTProject #NFTArtist #NFTCommunity #CNFT #CNFTCommunnity pic.twitter.com/0Nmp2F0oOx
— DropTown Saloon – Welcome! (@DropTownSaloon) February 17, 2023
US regulators have sued Do Kwon and Terraform Labs for the sudden collapse of the TerraUSD (UST) stablecoin and the associated LUNA token. Furthermore, the SEC revealed the involvement of an unnamed US trading company that significantly impacted the tokens associated with the Terra ecosystem. The SEC stated that, under the terms of the arrangement, the trading firm was able to purchase Luna for as little as 40 cents when it was trading at $90 on public markets.
Notably, in its press release, the SEC classified multiple crypto assets involved in the case as unregistered securities. Several divisions of the organization, including the Enforcement Division, the Complex Financial Instruments Unit, and the Crypto Unit, are participating in the investigation.
Chicago-Based Jump Trading Identified as Unnamed Company in Terraform Labs SEC Case
According to the SEC’s complaint filing, a third party assisted Terraform Labs in restoring the TerraUSD currency peg after it dropped below $1 in May 2021. The complaint alleges that Do Kwon and his company strategically arranged for a third party to purchase a substantial amount of UST to restore its peg, but the arrangement allowed the third party to profit from its investment.
Following the SEC’s complaint filing, a question remained unanswered about the trading partner that earned $1.28 billion in profits before Terra’s $40 billion ecosystem collapsed. The cryptocurrency community attempted to identify the unnamed company, which earned a record $1.28 billion during the collapse of Do Kwon’s crypto company.
The unidentified company is now reportedly Chicago-based Jump Trading. According to two individuals familiar with the transactions, Jump Trading is the undisclosed US trading entity accused by the SEC of backing the TerraUSD stablecoin.
However, the SEC has not filed any complaints against Jump or accused the company of any wrongdoing. A representative from Jump declined to comment on the matter.
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This article was written for Business 2 Community by Arslan Butt.
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