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US regulator charges crypto boss Do Kwon with fraud
https://www.whatjobs.com/news/world-news/us-regulator-charges-crypto-boss-do-kwon-with-fraud
By Nagasunder in US business news, posted February 18, 2023
US financial regulators have levied South Korean cryptocurrency boss Do Kwon and his organization Terraform Labs with "orchestrating a multi-billion dollar crypto asset securities fraud".
The Singapore-based company was responsible for the Terra Luna and TerraUSD tokens, which crashed massively last year.
It is estimated that the collapse cost investors more than $40 billion (£33.5 billion).
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US Securities and Exchange Commission (SEC) chairman Gary Gensler said: "We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for LUNA and Terra USD,".
"We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors."
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The SEC says Mr. Kwon and his company raised billions of dollars from investors by selling them "an interconnected suite of crypto asset securities" with many transactions being unregistered.
The SEC also alleges Mr. Kwon and Terraform made repeated claims about the tokens' value increasing and misled investors about the stability of TerraUSD.
However, the value of the token and its associated Luna cryptocurrency fell to near zero in May of last year.
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According to blockchain analytics firm Elliptic, investors in TerraUSD and Luna lost an estimated $42 billion globally.
It resulted in a sell-off of major cryptocurrencies like Bitcoin, Ethereum, and Tether. As a result, the term "cryptocrash" became popular on the internet.
Mr. Kwon said at the time: "I am heartbroken about the pain my invention has brought on all of you," Mr. Kwon said at the time.
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The SEC complaint, which contained additional allegations, did not specify where Mr. Kwon was located.
South Korean authorities, who have issued an arrest warrant for Mr. Kwon, stated in December they believed he was in Serbia.
Mr. Kwon previously denied being in hiding but did not reveal his location.
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He said on Twitter: "For any government agency that has shown interest to communicate, we are in full cooperation and we don't have anything to hide," he said on Twitter.
Mr. Kwon is facing fraud and capital market law violation charges in his home country of South Korea.
Source: BBC
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