Monat: Februar 2023

• Do Kwon reportedly held 10,000 BTC in a cold wallet.
• The now fugitive Terraform Labs founder reportedly cashed out a massive $100 million worth of Bitcoin through a bank in Switzerland.
• The SEC announced it had charged Do Kwon with defrauding investors.

The United States Securities and Exchange Commission (SEC) yesterday 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 is the founder of Terra, the crypto project that had a native token LUNA and stablecoin Terra USD (UST). He’s on the run and the latest news is that he cashed out massive amounts of Bitcoin (BTC) following the collapse of UST and LUNA.

SEC says Do Kwon defrauded investors

SEC charges against Do Kwon point to a plot to mislead investors, with the collapse of the then $40 billion LUNA ecosystem impacting the wider crypto market amid an intensifying crypto winter.

“We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for LUNA and Terra USD,” SEC Chair Gary Gensler said in a press release on Thursday.

“We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors,” he added.

Kwon cashed out millions of BTC via Swiss bank

As Bloomberg notes in a report published 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transfers began in June 2022 and were reportedly part of more than 10,000 BTC stashed in a cold wallet and periodically withdrawn through the Swiss-based bank.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. 

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 by Interpol was issued last year and the latest reports on his whereabouts suggested the South Korean citizen was in Serbia.

Terra (LUNA) and Terra Luna Classic (LUNC) price outlook

As Coinjournal reported on Friday morning, the price of Terra (LUNA) fell sharply following news the SEC had charged Kwon. 

Data from CoinGecko as of 9 am ET on Friday, also showed that the Terra Luna Classic price was 3.6% down at $0.00016773, while its market cap stood at $992 million. LUNC is a community-driven project that emerged out of the LUNA debacle.

The post Do Kwon withdrew $100M worth of BTC via Swiss bank, SEC says appeared first on CoinJournal.

• The market cap of Binance USD (USD) stablecoin has declined by $2.45 billion.
• Over $2.37 billion has moved from BUSD to Tether (USDT).
• USD Coin (USDC) has also seen its market cap shrink by about $739 million amid the regulatory events of the past few days.

Binance CEO Changpeng ‘CZ’ Zhao says the Tether has benefited most from the recent regulatory action against Binance USD (BUSD) and its issuer Paxos. But CZ reiterates that Binance does not issue BUSD.

Over $2.37 billion has moved from BUSD to USDT

As the negative impact of the order stopping Paxos from issuing BUSD jolted the crypto market, the flow of funds from the Binance branded dollar-pegged stablecoin ended with the USDT market capitalization gaining as BUSD’s declined.

In a tweet on Friday, Zhao noted that BUSD’s market cap had so far declined by over $2.45 billion and that most of it has gone into Tether’s stablecoin. The Binance chief noted that at least $2.37 billion in BUSD value had moved to USDT as traders sought to move capital from the Paxos-issued token.

BUSD market cap dropped -$2.45B (from 16.1B to 13.7B as of now), and most of it has moved to USDT.

USDT marketcap + 2.37B (From 67.8B to 70.1B)

USDC also declined -739M (from 42.3B to 41.5B)

Landscape is shifting.

(Note: BUSD is NOT issued by Binance.) pic.twitter.com/kVrZUYjuOh

— CZ 🔶 Binance (@cz_binance) February 17, 2023

According to Zhao, there’s a shift in the stablecoin market and the rotation of capital into the world’s largest stablecoin is an indication of that change.

While BUSD had managed to regain its dollar peg as of writing, the negative view following the regulatory crackdown means traders see USDT as the better alternative. 

Tether’s release of another $1 billion of USDT recently points to this outlook and as Zhao acknowledges, even USD Coin (USDC) has seen its market cap drop by over 739 million over the past few days.

Meanwhile, Binance has reportedly minted $50 million of True USD (TUSD) stablecoin, helping to push the price of TrueFi (TRU) higher. At the time of writing, the token was trading at $0.084, having gained a massive 88% in the past 24 hours.

The post Binance CEO says the stablecoin landscape is shifting appeared first on CoinJournal.

• The SEC has charged Terraform and its founder with fraud.
• The SEC accuses Terraform Labs of embezzling billions of dollars from investors.
• The news has sent the price of Terra LUNA crushing.

The US Securities and Exchanges Commission (SEC) has charged Terraform Labs, a Singapore-based blockchain payment protocol, and its co-founder Do Kwon, for orchestrating a multi-billion dollar fraud. The news has sent the price of LUNA tumbling and it had dropped by more than 6% at the time of writing.

According to a tweet by the US SEC, Terraform Labs PTE Ltd and Do Hyeong Kwon have been accused of “orchestrating a multi-billion-dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities.”

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.

— U.S. Securities and Exchange Commission (@SECGov) February 16, 2023

The press release by the US SEC stated:

“The SEC’s complaint alleges that Terraform and Kwon marketed crypto asset securities to investors seeking to earn a profit, repeatedly claiming that the tokens would increase in value. For example, they touted and marketed UST as a “yield-bearing” stablecoin, which they advertised as paying as much as 20 percent interest through the Anchor Protocol. The SEC’s complaint also alleges that, while marketing the LUNA token, Terraform and Kwon repeatedly misled and deceived investors that a popular Korean mobile payment application used the Terra blockchain to settle transactions that would accrue value to LUNA. Meanwhile, Terraform and Kwon also allegedly misled investors about the stability of UST.”

Months after Terra USD collapsed

SEC’s allegations come almost a year after the Terra USD (UST) stablecoin debacle that almost took down the entire crypto market. The collapse of the UST stablecoin spelt doom, especially for algorithmic stablecoins and investors are still sceptical to invest in them.

According to the SEC, the assets targeted in the allegation include Terra’s mAssets and Terra USD (UST).

The SEC also accuses Do Kown and Terraform Labs of manipulating their native tokens so that their value will eventually increase and allow users to earn profit.

Besides Terraform Labs and Do Kwon, the SEC has also listed a number of other individuals involved in the investigations including Roger Landsman, Daniel Koster, and Donald Battle and several others.

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