Home
News
- 1 The Securities and Exchange Commission (SEC) wants evidence from Terraform Labs’ co-founder.
- 2 The U.S. regulators want to ask questions to upgrade their charges against Terraform and its former CEO.
The SEC said that they want to ask Shin about the Kwons’ role at Chai and also they want to know how Chai uses the Terra blockchain. They have granted the motion to seek assistance from South Korea to question Terraform Labs’ co-founder, Daniel Shin as it builds a case against the firm and its co-founder Do Kwon.
District Judge Jed Rakoff granted the SEC’s July 10, 2023 motion asking questions to seek the Terra co-founder along with requesting documents from the Seoul-based payments provider Chai Corporation he founded.
The firm also wanted to satisfy the query about why Chai separated from Terraform. Shin and Kwon founded Chai in 2019 and shared offices and staff with Terraform until the two firms split in 2020.
About Terraform Labs, Chai, and SEC Action
Do Kwon and Daniel Shin founded Terraform Labs in 2018. This payment platform created a blockchain named Terra which collapsed in May 2023. Chai is a company co-founded by Kwon and Shin and the two companies split in 2020, with Kwon becoming Terraform’s CEO and Shin staying at Chai as CEO.
Kwon and the Terraform Labs didn’t argue the SEC’s motion and included their own questions and requests while previously they opposed the SEC’s allegations. The prior filing said that Kwon reached the United States’ trading representatives to help with the change in the market price of UST, which the company provided.
In February, SEC sued Terraform and Known for alleging Terra Luna Classic (LUNC) and TerraUSD (UST) was fraudulent.
They falsely declared that Chai used the Terra blockchain to process and settle transactions. The SEC declared that Terraform and Kwon forged transactions of its TerraKRW (KRT) which is Korean won pegged stablecoin to give the impression that Chai was using the blockchain.
The related crypto ecosystem of Terra collapsed in May 2022 which flashes around $40 Billion in value which made the crypto market suffer. It is not only the SEC but a South Korean prosecutor who also claimed many fraud charges against Shin with the risk of investigating Terraform’s cryptocurrencies.
Kwon currently is serving a four-month prison stint for trying to leave the country using a fake Costa Rican passport. Besides the charges from the SEC, Kwon also faces allegations of fraud in the U.S. and South Korea. Both countries have requested his expulsion.
Summary
Do Kwon, co-founder of Terraform Labs, is in jail currently due to forged passports. The SEC has charged him with alleged cryptocurrency fraud that has taken away $40 Billion from the market. He is also accused of fraud and deception in court.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
