Discussion

• @secgov @secgov on x

  Today we charged Singapore-based Terraform Labs PTE Ltd and Do Hyeong Kwon with orchestrating a multi-billion-dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities.

• @allyversprille Ally Versprille on x

  SCOOP: SEC poised to sue Terraform Labs, the company behind the failed TerraUSD stablecoin. w/ @austwein and @MuyaoShen https://twitter.com/...

• @mikeseligesq Mike Selig on x

  SEC complaint against TFL and Do Kwon alleges that LUNA and UST are securities. In a novel theory, the SEC not only characterizes UST as an investment contract but as a security bc it could be exchanged for a security (LUNA). Under this theory, nearly anything can be a security.

• @lex_node @lex_node on x

  whew lad, lots to digest in the SEC lawsuit vs Do Kwon and Terraform Labs right off the bat, a very interesting fact is that the SEC is being more thorough than usual—specifically running through the Howey test for various assets (UST, LUNA, and wLUNA) and also alleging that... h…

• @garygensler Gary Gensler on x

  This case demonstrates the lengths to which some crypto firms will go to avoid complying with the securities laws, but it also demonstrates the strength and commitment of the SEC's dedicated public servants. https://twitter.com/...

• @tier10k @tier10k on x

  [DB] U.S. SEC Files Securities Fraud Lawsuit Against Terraform Labs, Do Hyeong Kwon — Court Records: RTRS

• @parrotcapital @parrotcapital on x

  Scott Shay, Joseph DePaolo and Sarmen Saryan gave bank accounts to Sam Bankman-Fried, Changpeng Zhao, Do Kwon and countless other crypto criminals. $SBNY is directly responsible for aiding defrauding millions of crypto customers out billions of dollars. DOJ, do you job. 👇 https:/…

• @autismcapital @autismcapital on x

  The Do Kwon charges are *civil* not criminal (SEC). So, where are the criminal charges? The SEC jurisdiction is easier to charge because US investors are involved. The DoJ likely won't announce an indictment (if one exists) until they are able to get Do Kwon back in the country.

• @zguz Zack Guzmán on x

  The crypto disillusion summed up by a Terra employee in the SEC's case against Do Kwon hits so hard: “working at terra has reinforced my belief in conspiracy theories...the illusion of decentralization and true ... adoption...all from the armchair of a single man sipping whisky” …

• @traderrocko @traderrocko on x

  I personally think $LUNA failed not because of Do Kwon defrauding investors but wrong design/code of stablecoin which other players like SBF/FTX exposed to profit from it!

• @parrotcapital @parrotcapital on x

  With all the heat on SBF and CZ let's not forget that one of the biggest frauds of all is Do Kwon. He need to be brought to justice, just like Sam Trabuco and all the other fugitives who have made off with everyone's life savings: https://twitter.com/...

• @lex_node @lex_node on x

  for UST, the SEC also provides an alternative, non-Howey-based argument, that UST are “rights to subscribe” to a security (LUNA) and thus are themselves securities—again, this is an “enumerated security” type of argument (like the one for wLUNA) that does not rely on the Howey...…

• @meattc_ @meattc_ on x

  Alright, let's do this. https://twitter.com/...

• @sunil_trades Sunil K on x

  The SEC is charging Do Kwon Warning to all fraud profiteers (FTX collapse) Class action lawsuits (I filed) focus on compensating victims however draw backs include only defendants based in the US and usually within filing state SEC (Federal) : you can't hide internationally

• @meattc_ @meattc_ on x

  It's clear from the Summary that the SEC is going to take a specific angle on stablecoins here and, in fact apply Howey. How do we know? The expectation of profit from UST is the publicized use of the asset in Anchor to generate yield. https://twitter.com/...

• @caspiancey Cas Piancey on x

  spot the die hard LUNA shill 📸 https://twitter.com/...

• @lex_node @lex_node on x

  another first here: —>not using the Howey test for a token, but instead using another type of “enumerated security” term (as @collins_belton and I often speculated would happen) in this case, they say wLUNA was a “receipt for” a security — which itself is a security https://twitt…

• @du09btc @du09btc on x

  The #Terra #Luna #UST scam was perpetuated since 2021 with full knowledge that the peg mechanism was a fraud. Do Kwon always knew what he was doing. https://twitter.com/...

• @lex_node @lex_node on x

  you can expect the argument for UST being a security to be a roadmap for how the SEC goes after other stablecoins they will allege that integration, promotion, marketing, commercial deals etc building the stablecoin ecosystems are “efforts of others” that are “reasonably... https…

• @du09btc @du09btc on x

  “Do Kwon is innocent.” https://twitter.com/...

• @collins_belton Collins Belton on x

  Mm, the allegation of wLuna being a security is based on both a (very bad imo) Howey analysis and a novel approach using a different securities definition that doesn't rely on Howey or Reves. https://twitter.com/...

• @collins_belton Collins Belton on x

  Getting into the weeds now but this may have very far reaching implications for many projects. Despite Do's obvious fraud and deep involvement that might distinguish some of the Luna eco, much of the behavior alleged to create the securities law issues are endemic in the industry

• @esatoshiclub @esatoshiclub on x

  #TerraClassic $LUNC suffers major capital outflow and market cap drop following #SEC charges against founder #DoKwon, with losses of over $54 million in the last 24 hours, falling below $1 billion mark. https://twitter.com/...

• @davidzmorris David Z. Morris on x

  The SEC documents against @stablekwon confirm what had been widely rumored: that there was a secret bailout in May of 2021. This means every subsequent representation of TerraUSD's stability was an act of fraud. The likely counterparty, IMO: Jump. https://twitter.com/...

• @collins_belton Collins Belton on x

  OK, after an initial skim, there is ALOT going on and this may arguably be the most important SEC case brought to date for them to test MULTIPLE theories, but one of the biggest takeaways: they're alleging everything in Luna eco - UST, Luna, wLuna & MIR assets were securities. ht…

• @fintechfrank Frank Chaparro on x

  Regulatory headlines: - SEC announces suit against Do Kwon/Terra - Kraken pays $30m settlement with SEC over staking program - Binance expected to pay settlement with US regulators following investigation - Paxos agrees to stop issuing BUSD after NYDFS announcement

• @ryansadams Ryan Sξan Adams on x

  Gensler's next strategy is to go after Do Kwon and UST because he knows no one will defend them and if he wins he'll establish broad precedent for more control over crypto. It's evil genius. https://twitter.com/...

• @hosseeb @hosseeb on x

  Just read through the SEC case against Do Kwon/Terraform Labs so you don't have to. https://www.docdroid.net/... A few takeaways:

• @hosseeb @hosseeb on x

  6/ SEC insinuating that Do holds onto ~$100M from LFG/TFL. Overall, the biggest surprise for me was Chai being a complete lie—just how brazen it was. But beyond that, SEC trying to establish that every single asset within Terra was a security. https://twitter.com/...

• @revolvingdoordc @revolvingdoordc on x

  It's crypto lawsuit after lawsuit for the @SECGov now. Doubling the size of the agency's crypto enforcement unit last year is clearly paying dividends! https://twitter.com/...

• @web3isgreat @web3isgreat on x

  SEC files fraud charges against fugitive Terra/Luna CEO, Do Kwon February 16, 2023 https://web3isgoinggreat.com/ ... https://twitter.com/...

• @tier10k @tier10k on x

  https://twitter.com/... https://twitter.com/...

• @arbedout @arbedout on x

  “As alleged in our complaint, the ecosystem was neither decentralized, nor finance. It was simply a fraud propped up by a so-called algorithmic “stablecoin” - the price of which was controlled by the defendants, not any code.” https://www.sec.gov/...

• @baidakova Anna Baydakova on x

  “In a press release, SEC Director of Enforcement Gurbir Grewal said the project [Terra/LUNA] “was neither decentralized, nor finance.” ***mic drop*** https://www.coindesk.com/...

• @blkchain_demons @blkchain_demons on x

  The SEC has charged Do Kwon with securities fraud‼️ Charging the criminals after their stolen money is gone 🙌 But kind of late to the party there's already an arrest warrant for him in South Korea 🤦‍♂️ https://www.cnbc.com/... https://twitter.com/...

• @staska Stasys Bielinis on x

  Do Kwon trembles in fear somewhere in his cozy hideout (where neither Korean prosecutors nor Interpol can find him) at this bold and inspired act of an SEC. Who knows, it may even make $USDT and old Luna coin worthless https://www.techmeme.com/...

• @blaw @blaw on x

  Under securities law, a virtual currency may fall under the SEC's remit if Americans buy it to fund a company or project with the expectation of profiting from the efforts of those involved in it. https://blawgo.com/xPVc9Cr

• @nic__carter @nic__carter on x

  UST was the poisonous exhaust of a system with Luna on one end and Anchor on the other. It didn't have a non-enriching-TFL use. No one used it for real commercial activity. Fine with it being a security

• @nic__carter @nic__carter on x

  UST being a security and USDC not being a security are both consistent with Reves imo. UST was sold to fund terraform; it was administered by TFL; and people only bought it to put it in anchor. I have no problem with the SECs assessment there

• @robinwigg Robin Wigglesworth on x

  Deploying more charges — steady lads https://www.sec.gov/... https://twitter.com/...

• @johnreedstark John Reed Stark on x

  The SEC's crypto-enforcement sweep and relentless crypto-carpet bombing continues. Per SEC Enforcement Director Gurbir Grewal: “Today's action . . . once again highlights that we look to the economic realities of an offering, not the labels put on it.” https://www.sec.gov/... htt…

• @hosseeb @hosseeb on x

  1/ Fraud case is rock solid. Chai using Terra was a complete fabrication, with fake on-chain transactions and everything. I was surprised by how egregious this was. People at Terraform Labs knew it was bullshit. https://twitter.com/...

• @web3isgreat @web3isgreat on x

  Press release: https://www.sec.gov/... Complaint: https://www.sec.gov/...

• @muyaoshen @muyaoshen on x

  The suit detailed a deal between Terraform Labs with a “U.S. trading firm” to help protect UST's peg.. “U.S. Trading Firm received LUNA tokens at $0.40 per token, even during periods when LUNA was trading at more than $90 in the secondary market.” 👀

• @fatmanterra Fat Man on x

  February 17, 2023: SEC sues TFL for securities fraud. The filing confirms and elaborates on many of our previous findings including the Chai spoofing, Do Kwon's secret cashouts, and the secret 2021 Jump bailout. https://twitter.com/...

• @jacqmelinek Jacquelyn Melinek on x

  even the SEC doesn't know where Do Kwon is living rn https://twitter.com/...

• @carnage4life Dare Obasanjo on x

  The SEC plans to sue Do Kwon because the TerraUSD stable coin wasn't stable and investors lost money. Gary Gensler is going hard on barricading the barn door after the horse has already run off with everyone's money. https://www.bloomberg.com/...

• @fatmanterra Fat Man on x

  Now that the US government has officially verified that Terra was a complete fraud, the path forward is clear: 1. All TFL assets and ill-gotten gains seized and returned to UST victims 2. Find and arrest Do Kwon After what we now know, anything less is no longer sufficient. https…

• @htr_group @htr_group on x

  “Today's action not only holds the defendants accountable for their roles in Terra's collapse, but once again highlights that we look to the economic realities of an offering, not the labels put on it” https://www.cnbc.com/... https://twitter.com/...

• @codycarbonedc Cody Carbone on x

  This is interesting. The SEC is essentially that Seigniorage stablecoin arrangements = a security issuance. This is truly a “throw everything at the wall and see what sticks” approach by the SEC. https://twitter.com/...

• @mdudas Mike Dudas on x

  Good. I applaud US regulators when they take prudent and necessary action, even if extremely belatedly. https://twitter.com/...

• @tier10k @tier10k on x

  [DB] SEC Poised to Sue Company Behind Failed Terrausd Stablecoin: BBG

• @jwverret @jwverret on x

  SEC charges Do Kwon and Terraform Labs with fraud. This is a case for using the “total mix of information” element of materiality in a defense if I've ever seen one. Slam dunk case for defendant. https://www.sec.gov/...

• @fatmanterra Fat Man on x

  Amusing coincidence today: was talking about Do Kwon violating securities laws on Discord and this happens exactly one minute later https://twitter.com/...

• @dr_cswright Dr Craig S Wright on x

  Red notice time... Fugitive Stablecoin Founder Do Kwon Accused of Securities Fraud in U.S. https://www.wsj.com/...

• @allyversprille Ally Versprille on x

  Final version of the story here with some other scoop-y adds. Federal prosecutors in Manhattan and the CFTC are also conducting probes into Terraform Labs, per our sources. @avabmorrison https://www.bloomberg.com/...

• @parrotcapital @parrotcapital on x

  Long thread here by Gabe, but certainly worth a read given that it will have very powerful consequences for establishing case law. With Do Kwon on the run, it makes it just that much easier for the SEC to win their arguments and apply those rulings to others in the crypto space. …

• @lonewolf_eth @lonewolf_eth on x

  > ...the price of luna grew unstable and forced UST to break its $1 peg, an effort which sent both terra and luna spiraling What caused $LUNA to destabilize? #DoKwon @Terra $UST https://www.cnbc.com/...

• @tier10k @tier10k on x

  SEC VS DO KWON 🫡 https://www.docdroid.net/...

• @kangspace589 Kang Space on x

  And one eternity later @stablekwon finally gets charged https://www.sec.gov/... https://twitter.com/...

• @yoda Drew Olanoff on x

  the obvious grift was one thing, but the unrelenting cockiness from this guy made this whole thing mind boggling. https://twitter.com/...

• @fatmanterra Fat Man on x

  This filing from the SEC wholly corroborates the insider's testimony about Do Kwon faking Chai transaction volume to garner investments into LUNA under fraudulent pretenses. Anchor and the entire Terra ecosystem was founded on a big lie. https://twitter.com/... https://twitter.co…

• @samcallah Sam Callahan on x

  SEC got around to charging Do Kwon and Terraform for defrauding investors. The complaint states that the Terraform ecosystem was neither decentralized nor finance. It was simply a fraud propped up by an algorithmic stablecoin. https://www.sec.gov/...

• @valkenburgh Peter Van Valkenburgh on x

  Need to review the complaint but I suspect there will be pretty reasonable interpretations of the Howey test therein. Tokenizing obvious (and in some cases de jure as well as de facto) securities doesn't magically turn them into commodities. https://www.sec.gov/...

• @poordart @poordart on x

  “I'm not hiding in Serbia because it doesnt extradite to South Korea - Serbia is just a good place to be” Do Kwon needs to know tho https://twitter.com/... https://twitter.com/...

• @news_of_alpha @news_of_alpha on x

  Do Kwon and Terraform Labs transferred over 10,000 Bitcoin out of Luna and turned some of the tokens into cash via a Swiss bank, according to the SEC.