.LisaBraganca, a former enforcement branch chief at the SECGov, believes Terraform Labs founder Do Kwon knowingly pitched his stablecoins to U.S. investors, making him subject to U.S. jurisdiction. _franvela reports
South Korean authorities issued a warrant for Kwon's arrest on charges of fraud last September, four months after the UST stablecoin and its sister stablecoin LUNA lost most of their value. Kwon is a South Korean national.
On CoinDesk TV, Braganca said the SEC is bringing charges against Kwon and those who worked with him because he allegedly misled investors about how the UST stablecoin was backed. “LUNA and Terraform [Labs] were not stable as they were supposed to be,” she said. The UST token was intended to maintain a peg to the U.S. dollar, while LUNA, its companion token, was intended to stabilize UST’s price.
“The algorithm that Do Kwon said was in place was supposed to cause them [LUNA/UST] to come back into balance and be stablecoins,” Braganca said. But instead, Braganca claimed, Kwon “went to a third party to get a big buy to prop it [LUNA/UST] up,” and is alleged to have engaged in market manipulation. She said that “more sophisticated institutional investors” also lost billions of dollars with the collapse of Terra.Read more:
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