Terraform Labs and Founder Do Kwon Accused by SEC in $40 Billion Stablecoin Collapse

Terraform Labs and its founder, Do Kwon, were found guilty of fraud for misleading investors before their stablecoin collapsed in 2022.

[{"selector":"#anim-272510a6-da1e-4c79-ab64-6e447982a8ca [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] The SEC accused Terraform and Kwon of lying about the stability of their stablecoin, TerraUSD, and falsely claiming their blockchain was used in a popular Korean mobile payment app.

Investors lost over $40 billion when the TerraUSD's peg to the dollar failed in May 2022.

[{"selector":"#anim-99ae8b6a-3c28-48fe-9929-033913176728 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}]

The SEC seeks penalties and orders barring Kwon and Terraform from the securities industry, with a judge set to decide in the coming weeks.

[{"selector":"#anim-862bef01-335d-4134-a5bb-c25a7bc3860b [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}]

Terraform expressed disappointment with the verdict and questioned the SEC's legal authority to bring the case.

[{"selector":"#anim-a16bf510-418b-4c56-a9d9-7cfa0a4ac8c6 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}]

The collapse of TerraUSD and Luna caused chaos in the crypto market, leading to bankruptcy filings by several companies.

[{"selector":"#anim-0e7970d6-5799-41d1-bb39-d85758f3fc89 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Learn more