TerraUSD stablecoin creator accused of $40 billion fraud
The collapse of TerraUSD and Luna largely triggered the crisis in the cryptocurrency market
The US Securities and Exchange Commission (SEC) has filed a civil lawsuit against the creator of the TerraUSD stablecoin and Luna cryptocurrency. Entrepreneur Do Kwon was accused of fraud.
Source. The Wall Street Journal
Details. After the collapse of TerraUSD and Luna, as a result of which investors lost about $40 billion, the entrepreneur decided to flee and is now wanted by Interpol.
According to the SEC, Do Kwon and the Singaporean company Terraform Labs misled investors by misrepresenting the riskiness of investments in TerraUSD and Luna.
Do Kwon claimed that Korean mobile payment app Chai used Terraform's software to process transactions.
But, as the commission found out, this was not true and Terraform only created a misleading impression that its software was being used in the real world.
The collapse of TerraUSD and Luna largely started the crisis in the cryptocurrency market. The fall of stablecoin and its cryptocurrency pair in May was followed by the collapse of bitcoin.
The panic spread to the world's most popular stablecoin, Tether, which occupies more than a third of the market.
Background. As reported, the value of bitcoin has reached its highest level in the last six months – now the world's most widespread cryptocurrency costs $25,000.
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