Terraform Labs CEO Do Kwon’s location is still “unknown,” according to the Securities and Exchange Commission’s lawsuit, which claims he fabricated details to supercharge growth on the Terra ecosystem before its collapse in 2022.
Do Kwon co-founded Terraform Labs with Daniel Shin in 2018, a year before they launched the Terra network. The company also created TerraUSD (UST), an algorithmic stablecoin. By April 2022, its market capitalization had reached $17 billion and it unseated Binance USD as the third-largest stablecoin in circulation, according to CoinGecko.
But in May, UST lost its dollar peg. In a matter of days, $40 billion worth of value had been wiped out and the Terra network was shut down.
Now the SEC is bringing down the hammer. Here’s what’s in its lawsuit.
10,000 Bitcoin
The SEC alleges 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.
According to the SEC, 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.
“Between June 2022 and the date of this complaint, over $100 million in fiat currency has been withdrawn from that Swiss bank,” the SEC writes in its lawsuit.
If true, it stands in stark contrast to the investors who lost huge amounts of money when UST crashed last year. The SEC lawsuit 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
