- Kwon acknowledged in June 2023 to pay an $80 million civil fine and he was prohibited from crypto transactions as part of a $4.55 billion settlement.
- Kwon reportedly told investors a computer algorithm known as “Terra Protocol” has reinstated the value of the coin when it slumped down its peg in May 2021.
- The indictment also notes that the majority of the growth followed brazen deceptions of Kwon regarding Terraform and its technology.
The cofounder of Terraform Labs, Do Kwon pleaded not guilty on December 2 to United States criminal fraud charges after being expelled from Montenegro this week. On December 2, the Federal prosecutors in Manhattan revealed a nine-count indictment alleging Kwon, for security fraud, wire fraud, commodities fraud, and money laundering scheme.
The judge directed Kwon arrested after Chesley said he would not look for bail at this time. Kwon took a copy of the 79-page indictment with him as United States marshals directed him out of the courtroom. He is anticipated back in court on January 8.
Kwon’s acknowledgment
Kwon acknowledged in June 2023 to pay an $80 million civil fine and he was prohibited from crypto transactions as part of a $4.55 billion settlement that he and Terraform landed up with the US Securities and Exchange Commission.
In the indictment of December 2, the Manhattan US Attorney’s office claimed Kwon misled investors in 2021 regarding TerraUSD, a so-called stablecoin built to keep up worth of $1.
Kwon reportedly told investors a computer algorithm known as “Terra Protocol” had reinstated the value of the coin when it slumped down its peg in May 2021, when in fact he checked out for a high-frequency trading company to covertly purchase millions of dollars of the token to essentially hold up its value.
The attorney said that false claims and others piloted retail as well as institutional investors to purchase Terraform products and increase the worth of Luna, a more traditional token made by Kwon that wavered in worth but was intimately associated with TerraUSD, to $50 billion by the spring of 2022.
The broad havoc in the market
The indictment also notes that the majority of the growth followed brazen deceptions of Kwon regarding Terraform and its technology. TerraUSD and LUNA collapsed that same month, driving the value down of other cryptocurrencies such as Bitcoin (BTC).
It also resulted in causing broad havoc in the crypto market, and the prosecutors did not recognize the trading company. The attorneys of the Security and Exchange Commission revealed in their civil case that Jump Trading had supported TerraUSD in May 2021. However, Jump didn’t reply to requests for comment.
In a trial on the claims of the SEC, a federal jury in Manhattan found Kwon as well as Terraform responsible in April for robbing crypto investors. The attorney of Terraform had mentioned in closing arguments that the firm and Kwon had been honest regarding their products and its working mechanism, even when they couldn’t make up.
