Terraform Labs and co-founder Do Kwon have been charged with fraud by the U.S. Securities and Exchange Commission (SEC).
Terraform Labs is the company behind the Terra (LUNA-USD) and TerraClassicUSD (USTC-USD) cryptos. The charges against the company and its co-founder come after the crypto underwent a crash in May 2022.
According to the charges from the SEC, both Terraform Labs and Do Kwon defrauded investors. Here’s an official statement from SEC Chair Gary Gensler collected by Axios:
“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 […] We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.”
How This Affects Terra Today
With today’s news of the SEC investigation and charges against Terraform Labs, both Terra and TerraClassicUSD aren’t doing so hot. This has LUNA down 2.9% and USTC down 6.9% over the past 24-hour period as of Friday morning.
If the battle against the SEC doesn’t go well for Terraform Labs, it could spell further trouble for these cryptos. Investors will want to keep that in mind before taking any stakes in them.
Traders searching for more of the latest market news will want to keep reading!
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
