#LUNC✅ Terraform Labs and its former CEO, Do Kwon, have been found guilty of misleading investors in crypto assets. They violated the Securities Act 1933 by selling crypto assets without proper registration

1. Here are the key details:

SEC’s Allegations:

The SEC alleges that many of the claims Kwon made about Terra were simply made up.

Among the more startling claims, the Commission alleges that Kwon transferred 10,000 Bitcoin (BTC) out of Terraform Labs and Luna Foundation Guard (LFG) to a Swiss bank account. That’s a stash worth almost $250 million at today’s prices.

Kwon has been transferring BTC from wallets belonging to TerraForm and LFG to a Swiss bank account, where he’s been converting it to cash. Over $100 million in fiat currency has been withdrawn from that Swiss bank between June 2022 and the date of the SEC complaint.

This stands in stark contrast to the investors who lost huge amounts of money when TerraUSD (UST) crashed last year.

The SEC lawsuit also specifically mentions a pharmacist in California who borrowed $400,000 against their home to purchase UST and a painter in Vermont who invested $20,000 that was otherwise earmarked for his son’s college tuition.

Terra’s Partnership with Chai:

On the road to becoming the third-largest stablecoin, Kwon made some big claims about the Terra network and UST.

However, Terra’s partnership with payments app Chai didn’t involve the kind of integration that Kwon promised, according to the SEC’s lawsuit.

Penalties Imposed:

The SEC has imposed substantial penalties totaling $5.2 billion on Terraform Labs and its co-founder, Do Kwon.

The SEC filed in a New York court, demanding $4.7 billion as repayment and interest.

Additionally, they want $520 million in fines: $420 million from Terraform and $100 million from Kwon.

Kwon is also facing legal issues in Montenegro and could face charges in the U.S. and South Korea.