• The SEC has charged Do Kwon, the founder of Terraform Labs, with defrauding investors.
• The regulator’s complaint alleges that Kwon cashed out a massive $100 million worth of Bitcoin through a bank in Switzerland.
• The SEC is now seeking to bring Kwon to justice and recover the funds lost by investors.
SEC Charges Do Kwon With Fraud
The United States Securities and Exchange Commission (SEC) yesterday announced charges against Do Kwon, the founder of Terraform Labs. The regulator’s complaint is that Kwon and his company orchestrated a scheme that saw him defraud investors.
Do Kwon Cashed Out $100 Million Worth Of BTC
Do Kwon reportedly held 10,000 BTC in a cold wallet. He then cashed out a massive $100 million worth of Bitcoin through a bank in Switzerland. According to Bloomberg’s report published Thursday, 17 February, the transfers began in June 2022 and were part of more than 10,000 BTC stashed in a cold wallet and periodically withdrawn through the Swiss-based bank.
Kwon Allegedly Committed Fraud
The SEC allege that Do Kwon committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors. SEC chair 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.“
Kown On The Run
Unlike Sam Bankman-Fried who was arrested swiftly following the collapse of his firms FTX and Alameda Research, Do Kwon continues to evade capture. An arrest warrant has been issued but he remains at large as authorities continue their efforts to locate him.
SEC Seeking To Recover Lost Funds
The SEC is now seeking to bring Do Kown to justice and recover the funds lost by investors due to his fraudulent activities. It remains unclear how much money has been recovered so far or if any will be recouped at all from this incident.