Do Kwon: A US regulator accuses the head of the cryptocrash of fraud

Do Kwon, the founder of Terraform Labs

Do Kwon, a failed South Korean cryptocurrency executive, and his business Terrraform Labs have been accused by US financial regulators of "orchestrating a multi-billion dollar crypto asset securities fraud.".

The Terra Luna and TerraUSD tokens, which collapsed spectacularly last year, were created by the Singapore-based company.

Investor losses from the collapse are estimated to have exceeded $40bn (£33.15bn).

A BBC request for comment was not immediately answered by Mr. Kwon or Terraform Labs.

Gary Gensler, chairman of the Securities and Exchange Commission (SEC), said in a statement, "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.

Additionally, "we allege that they committed fraud by repeatedly making false and deceptive claims to gain investors' trust before causing catastrophic losses for investors," the lawyer continued.

The SEC claims that Mr. Kwon and his business raised billions of dollars from investors by offering them "an interconnected suite of crypto asset securities," many of which were done without registering the transactions.

The SEC also charged Mr. Kwon and Terraform with misleading investors about the stability of TerraUSD and making repeated claims about the tokens' value growth.

However, in May of last year, the value of the token and the associated Luna cryptocurrency plummeted to almost nothing.

According to blockchain analytics company Elliptic, investors in TerraUSD and Luna lost an estimated $42 billion worldwide.

Major cryptocurrencies like Bitcoin, Ethereum, and Tether all saw a sell-off as a result. The phrase "cryptocrash" became popular online as a result.

At the time, Mr. Kwon said, "I am heartbroken about the suffering my invention has caused on all of you.

The location of Mr. Kwon was not specified in the SEC complaint, which also contained other allegations.

Authorities in South Korea, who have a warrant out for Mr. Kwon's arrest, stated in December that they thought he was in Serbia.

Mr. Kwon previously refuted rumors that he was hiding, but he remained mum on his whereabouts.

He wrote on Twitter, "For any government agency that has shown interest in communicating, we are in full cooperation and we have nothing to hide.".

In his native South Korea, Mr. Kwon is accused of fraud and violating the capital markets law.

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