• Do Kwon, the founder of Terraform Labs, is accused by the SEC of defrauding investors.
• The SEC alleges that he cashed out $100 million worth of Bitcoin through a bank in Switzerland.
• He is currently on the run from authorities.
Charges Against Do Kwon
The United States Securities and Exchange Commission (SEC) recently 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 Millions of BTC via Swiss Bank
As Bloomberg reported Thursday 17 February, Kwon’s company had ostensibly moved and cashed out over $100 million worth of Bitcoin using an unnamed banking provider in Switzerland. The transfers began in June 2022 and were reportedly part of more than 10,000 BTC stashed in a cold wallet and periodically withdrawn through the Swiss-based bank.
The SEC allege the fraudulent transactions had continued up to the date of its official complaint against Do Kwon and its firm. They claim that Terraform and Do Kwon failed to provide full, fair, and truthful disclosure as required for their crypto asset securities, most notably LUNA and Terra USD (UST). Furthermore they allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.
Do Kwon 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 authorities have yet to locate him.
Do Kwons‘ alleged actions resulted in significant losses for many investors across multiple crypto projects linked with LUNA ecosystem amid an intensifying crypto winter. Authorities are still searching for him with hopes that he will be brought to justice soon.