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April 16, 2023 Bitcoin.com

Embattled Terra (LUNA) Founder Do Kwon Arrested in Montenegro: Report

March 23, 2023 The Daily Hodl

Report: DOJ and FBI Investigating Terraform Labs in Connection to Algorithmic Stablecoin Collapse

March 14, 2023 Bitcoin.com

FBI, NY authorities probes collapse of TerraUSD stablecoin: Report

March 14, 2023 Coin Telegraph

Coin Telegraph

The controversial founder of Terraform Labs, Do Kwon is at the center of the investigation, despite believed to be hiding out in Serbia.

The United States Justice Department is reportedly investigating the collapse of the TerraClassicUSD (USTC) stablecoin which contributed to a $40 billion wipe out in the Terra ecosystem last May.

Two agencies within the department — the Federal Bureau of Investigation (FBI) and Southern District of New York (SDNY) have interrogated former staff at Terraform Labs in recent weeks, according to a Mar. 13 report by the Wall Street Journal (WSJ).

The probe covers similar ground to a lawsuit filed against Terraform Labs and its founder Do Kwon by the U.S. Securities Exchange Commission on Feb. 16, according to people familiar with the matter.

Among topics that investigators have asked about was the relationship between Chai, a South Korean-based payment platform and the Terra blockchain on which USTC operated.

The SEC alleged in its filing alleged that Kwon misled investors into believing that Chai transactions were processed on the Terra blockchain.

*Do Kwon speaking at a conference about Terra before the LUNC and USTC collapsed. Source:* *Terra.*

The SEC in its lawsuitalso accused Kwon of misleading investors about the risks of the algorithmic-based stablecoin, which is designed to be pegged 1:1 to the U.S. dollar.

It is unclear what specific charges the Justice Department is potentially pursuing. The investigation does not necessarily mean that charges will be filed.

Since the collapse, Kwon reportedly left South Korea for Singapore, Dubai, and now Serbia, where he is now believed to be, according to South Korean officials. Two South Korean authorities were recently sent to Serbia to find Kwon but were unsuccessful in their search attempts.

Kwon however claims he is not “on the run” despite the South Korean prosecutors issuing Kwon an arrest warrant on Sept. 14 and a red notice filed by Interpol, a global law enforcement agency on Sept. 26.

However, Kwon claims that he hasn’t seen a copy of the South Korean arrest warrant, according to an October interview on the Unchained Podcast with Laura Shin, and he continues to deny fraud allegations on social media.

I am not “on the run” or anything similar - for any government agency that has shown interest to communicate, we are in full cooperation and we don’t have anything to hide
— Do Kwon (@stablekwon) September 17, 2022

Meanwhile, New York prosecutors are understood to be investigating a series of chat-group investigations from former members at Jump Trading, Jane Street and Alameda Research, which filed for bankruptcy alongside FTX, according to a Mar. 13 report by Bloomberg.

The investigation is reportedly looking into whether market manipulation tactics were involved in the TerraUSD stablecoin project.

Cointelegraph reached out to Terraform Labs but did not receive an immediate response.

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Terra lawsuit a ‘roadmap’ to attack other stablecoins: Delphi Labs

February 17, 2023 Coin Telegraph

Algorithmic stablecoin

Delphi Lab's general counsel said the SEC was being "more thorough than usual" in its lawsuit against Terraform Labs and its co-founder Do Kwon.

The United States Securities and Exchange Commission’s (SEC's) lawsuit against Terraform Labs and its co-founder Do Kwon could be seen as an SEC “roadmap” to taking down other stablecoins, according to a lawyer.

Gabriel Shapiro, general counsel at investment firm Delphi Labs, explained to his 33,800 Twitter followers on Feb. 16 that the SEC’s arguments in its complaint against Kwon and Terraform were “more thorough than usual.”

whew lad, lots to digest in the SEC lawsuit vs Do Kwon and Terraform Labs

right off the bat, a very interesting fact is that the SEC is being more thorough than usual--specifically running through the Howey test for various assets (UST, LUNA, and wLUNA) and also alleging that… https://t.co/1JsBQijMnw pic.twitter.com/qHuL6mKpeo
— _gabrielShapir0 (@lex_node) February 16, 2023

Shapiro’s analysis follows the SEC’s Feb. 16 lawsuit against Kwon and Terraform alleging they “orchestrat[ed] a multi-billion dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities.”

Shapiro suggested the case could serve as a “roadmap” for how the regulator may sue other stablecoin issuers in the future. He acknowledged the SEC made the case that Terra’s algorithmic stablecoin, TerraClassicUSD (USTC), constitutes a security:

“[The SEC] will allege that integration, promotion, marketing, commercial deals etc building the stablecoin ecosystems are ‘efforts of others’ that are ‘reasonably expected’ and can lead to profits in connection with the stables.”

He pointed out the SEC applied the four prongs of the Howey Test to argue that USTC, Terra Luna Classic (LUNC) — renamed from Terra (LUNA) — and Wrapped LUNA (wLUNA) all constituted securities under U.S. securities laws.

*Delphi Labs General Counsel Gabriel Shapiro’s take on the SEC’s lawsuit against Terraform Labs and its CEO Do Kwon. Source:* *Twitter.*

The SEC also argued that Terraform Labs breached U.S. securities laws by launching the Mirror Protocol, which allowed its users to create what Terraform called an “mAsset,” a crypto version of an asset that “mirrors” the price behavior of other assets such as stocks.

The regulator claimed Terraform Labs committed this securities-based swap through the MIR token — which Shapiro believes to be a “first” of all the cryptocurrency-related lawsuits filed by the SEC.

Shapiro noted the SEC’s claim that wLUNA constituted a “receipt” for a security was another “first.”

*Delphi Labs General Counsel Gabriel Shapiro’s analysis on the SEC’s lawsuit filing against Terraform Labs and its CEO Do Kwon. Source:* *Twitter.*

Ryan Sean Adams, the host of the crypto-oriented podcast Bankless, made a similar argument to his 221,300 Twitter followers on Feb. 16, noting that a legal victory against Terraform Labs would make it easier to go after other stablecoin issuers.

Gensler's next strategy is to go after Do Kwon and UST because he knows no one will defend them and if he wins he'll establish broad precedent for more control over crypto.

It's evil genius. https://t.co/FDLoeVcTLb
— RYAN SΞAN ADAMS - rsa.eth (@RyanSAdams) February 16, 2023

The Terra-linked tokens infamously crashed in May, 2022, which was in part triggered when USTC lost its peg to the U.S. dollar. As LUNC was closely linked to USTC, its price fell by virtually 100% and triggered a wider downturn in the crypto markets, wiping out approximately $40 billion from the crypto markets.

Kwon maintains that he is not “on the run,” and is believed to be residing in Serbia according to South Korean officials — who issued a warrant for his arrest.

Earlier in February, two South Korean prosecutors flew to the Balkan state to find Kwon, however, the search attempt was unsuccessful.

Cointelegraph contacted Terraform Labs for comment on the lawsuit but no immediate response was received.

South Korean officials traveled to Serbia to find Do Kwon

February 8, 2023 Coin Telegraph

arrest warrant

South Korean authorities have previously requested cooperation from the Serbian government to bring Kwon back.

The hunt for the controversial founder of the now-collapsed Terra ecosystem, Do Kwon, has intensified with South Korean officials reportedly confirming they sent at least two people to Serbia to track him down.

According to a Feb. 7 Bloomberg report, the prosecutor’s office in Seoul said the reports “aren’t false” regarding members of its team trekking out to the Balkan state to find Kwon.

It appears at least two state officials went — one from the prosecutor’s office and the other from South Korea’s Justice Ministry.

Do Kwon speaking at a conference about Terra before the ecosys. Source: Terra.

South Korean-based publication Chosun Media reported on Dec. 11 that a state intelligence official informed them that Kwon had based himself in Serbia.

There is currently no extradition treaty between South Korea and Serbia.

This likely made Serbia a great hideout spot for Kwon, according to a recent opinion article from Minso Kim, a writer for the South Korean publication Chosun Media.

South Korea has however stripped Kwon of his passport, which may make future travel more difficult.

Kwon has been accused of being on the run since Sept. 14, when South Korean prosecutors issued an arrest warrant against him, an accusation that he denied in October.

The 31-year-old fallen entrepreneur has also been accused of breaching capital markets laws.

While Kwon is known to be a prolific tweeter, he went nearly two months without tweeting or retweeting a single post — causing some to speculate what the controversial figure has been up to.

But Kwon recently responded to an evocative tweet targeted at him, stating that he hasn’t stolen any money and has never had any “secret cashouts.”

I find that Twitter is a good place for rumors but poor place to get facts

I've stolen no money and never had "secret cashouts" - happy to address specific allegations

In any case, good day to you
— Do Kwon (@stablekwon) February 1, 2023

To date, Kwon denies any wrongdoing.

The collapse of the Terra ecosystem was in part triggered by the de-peg of its TerraClassicUSD (USTC) algorithmic stablecoin, UST. Terra Classic (LUNC) was closely linked to the stablecoin, with that too falling close to 100%.

Approximately $60 billion worth of value was wiped out of the ecosystem.

Cointelegraph reached out to Terraform Labs and the South Korean Prosecutor’s office for comment but did not receive an immediate response.

Here’s how Bitcoin promotes global financial inclusion, according to Prince Philip of Serbia

January 4, 2023 Coin Telegraph

bitcoin regulation

Prince Philip of Serbia outlines key ways in which Bitcoin promotes global financial inclusion and its importance in conflict-affected nations.

The fundamental aspects of Bitcoin (BTC) continue to power global financial inclusion, financial privacy and autonomy in conflict-affected nations despite difficult macroeconomic and cryptocurrency market conditions over the past year.

These are the key takeaways of an in-depth interview with Prince Philip of Serbia and Yugoslavia conducted by Cointelegraph Brasil’s Cassio Gusson as 2023 gets underway.

Prince Philip Karađorđević shared his thoughts on the sector as he joined Jan3 as its chief strategy officer. The Bitcoin technology company seeks to drive the adoption of the preeminent cryptocurrency and was founded by Bitcoin proponent Samson Mow in 2022.

In April 2022, Jan3 announced a partnership to help develop El Salvador’s Bitcoin City and has since opened up an office in the BTC-friendly nation, according to Prince Philip. The company also intends to provide guidance and services to other nations looking to adopt Bitcoin in some capacity.

Prince Philip told Cointelegraph that Bitcoin remains important as the preeminent cryptocurrency, with its technological specifications allowing for the emergence of a fairer monetary system and individual sovereignty of wealth:

“Bitcoin, specifically, has the potential to promote financial inclusion because of its decentralized nature, which makes it resistant to censorship and manipulation.”

This is particularly important for individuals or communities without access to financial institutions or those residing in countries with unstable or corrupt governments and institutions.

Prince Philip also highlighted Bitcoin’s ability to “bank the unbanked,” given its low barrier to entry. Any person with a smartphone can download a Bitcoin wallet and gain access to “basic banking services,” which has become extremely relevant in emerging economies:

“Issuing a checking account with a minimum balance, a checkbook, a debit card, is simply too expensive for low-income consumers in the developing world, and for the banks themselves.”

Furthermore, Prince Philip highlighted that Bitcoin has no branches, correspondent banking relationships nor employees. Stablecoins are becoming equally useful in developing nations where people want to save in the U.S. dollar:

“Bitcoin and stablecoins have the potential to provide much-needed financial inclusion to people in countries with limited or no access to traditional banking services.”

Both options provide a secure, cost-effective means to send and receive payments, even in remote areas with limited infrastructure. The confines and regulations of traditional banking are also removed, giving people access to some sort of financial facility where traditional services are not accessible.

Conflict-affected nations are also prime candidates for Bitcoin adoption, according to Prince Philip. Bitcoin facilitates cross-border transactions, offers financial privacy and autonomy, and promotes economic development:

“This can be particularly useful in countries with authoritarian governments or a history of conflict, where individuals may be concerned about revealing their financial information or being subject to censorship or seizure of assets.”

El Salvador has established itself as the banner carrier for sovereign Bitcoin adoption after becoming the first country to recognize BTC as legal tender in June 2021. While there are some teething problems remaining — as Cointelegraph journalist Joe Hall outlined after a recent visit to the nation — El Salvador is a living example of what nation-led Bitcoin adoption looks like.

Prince Philip believes that more countries should allocate a portion of their national treasury to Bitcoin, highlighting the established moniker of digital gold. There are tangible results being realized in the country as well, which Prince Philip describes as an example for other nations to follow:

“Already we’re starting to see the economic benefits of the Bitcoin policies, including accelerated GDP growth, tourism, new businesses being established and many other intangible markers.”

While Bitcoin is positioned as a driver of financial freedom, Prince Philip gave a cautionary comment on the development of central bank digital currencies. He cited caveats and limitations to nation-controlled CBDCs, which could be used to place restrictions or outright blocks on people’s money.

Prince Philip of Serbia suggests bringing Bitcoin into the classroom

August 25, 2022 Coin Telegraph

Bitcoin

The prince, jokingly implying he was rebuilding amid a bear market, constructed a sandcastle on the beach at the Surfin’ Bitcoin 2022 before it was unceremoniously stepped on.

Speaking to Cointelegraph over sandcastles at the Surfin’ Bitcoin 2022 event at Casino de Biarritz in France on Thursday, Prince Philip said he was “bullish on Bitcoin” in part because of the impact it could have on children’s education around the world. The prince, a self-described Bitcoin (BTC) maximalist, hinted that part of his keynote address at the crypto conference — only the second one for which he was a speaker — will focus on informing those in and out of the space of the potential benefits of Bitcoin.

“Kids need to understand what Bitcoin is about,” said Prince Philip. “The main thing is the history of money — this is something that we weren’t taught in schools [...] Education is getting worse as I can see it.”

Citing an example from his own family, Prince Philip said his four-year-old son Stefan was trying to develop some conceptions around Bitcoin by watching his father:

“He’s trying to get an idea of what Bitcoin is [...] He understands that there’s Bitcoin and his father likes to talk about it.”

Filip Karađorđević, Hereditary Prince of Serbia and Yugoslavia, also known as Philip Karageorgevitch, says that education is lacking when it comes to cryptocurrencies like Bitcoin.

*Prince Philip building sand castles with Cointelegraph's Joe Hall at Surfin’ Bitcoin 2022*

Prince Philip, jokingly implying he was rebuilding amid a bear market, constructed a sand castle on the beach at the venue before it was unceremoniously stepped on by a passerby. In July, he reportedly said that Bitcoin adoption was inevitabile for all countries whose citizens practice Islam because “it makes perfect Sharia money.”

The BTC maximalist, though always a public figure due his title, became known to many in the crypto space following a March interview in which he said “Bitcoin is freedom, and this is something that I want for everyone.” He also attended the Bitcoin Miami conference in 2022. However, the prince has suggested he largely does not have the authority to declare the crypto asset legal tender as El Salvador did in September 2021.

Serbia

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