The SEC has obtained a court order to seek records from Singapore’s regulator as part of its lawsuit against Terraform Labs and its founder Do Kwon for allegedly defrauding investors through a stablecoin scheme.
In February, the SEC filed a lawsuit against Terraform and Kwon, accusing them of offering unregistered securities and engaging in a stablecoin scheme that defrauded investors.
Bloomberg reports that U.S. Judge Rakoff has rejected Terraform Labs’ attempt to block the SEC from obtaining records from MAS in a lawsuit. The SEC wants MAS papers from Terraform, Kwon, and Luna Foundation Guard, a fund that promotes TerraUSD stablecoin.
Terraform Labs launched UST, a stablecoin backed by LUNA. But the SEC claims they sold billions in crypto securities linked to UST and LUNA, such as mAssets that mimicked US stocks.
The SEC claims that Terraform and Kwon misled investors about the stability of UST, the use of LUNA and the regulatory status of their products.
UST crashed in May 2022, losing its peg and wiping out billions in market value, causing massive losses for investors. The SEC accuses Terraform and Kwon of securities fraud and seeks disgorgement, penalties and injunctions.
Do Kwon, who fled South Korea to face embezzlement and breach of trust allegations, was detained by Montenegro in March. Consequently, both the US and South Korea are seeking his extradition.
Do Kwon, who fled South Korea to face embezzlement and breach of trust allegations, was detained by Montenegro in March. Consequently, both the US and South Korea are seeking his extradition.
Kwon has denied any wrongdoing and blamed the collapse of UST on market manipulation and regulatory uncertainty.
SEC takes action against crypto companies and individuals for violating securities laws.
