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US Government Estimates Do Kwon’s Victim Count Potentially Exceeding 1,000,000 People

US Government Estimates Do Kwon’s Victim Count Potentially Exceeding 1,000,000 People

Do Kwon’s alleged schemes could have impacted more than 1 million victims worldwide, according to US prosecutors. US authorities extradited Kwon, the disgraced co-founder of the Terra (LUNA) ecosystem, late last month. Kwon faces fraud charges related to the multibillion-dollar downfall of Terra in 2022. In a recently submitted court document, prosecutors argue that Kwon’s […]

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Man Loses $188,000 in Crypto Scam to Fraudster Posing As Childhood Friend: Report

Do Kwon’s superseding indictment includes money laundering charge

The Terraform Labs co-founder was indicted on eight felony charges in 2023 but will likely face an additional count for money laundering conspiracy.

The United States Attorney’s Office revealed an additional charge for Terraform Labs co-founder Do Kwon following his extradition from Montenegro: money laundering conspiracy.

In a superseding indictment unsealed on Jan. 2 in the US District Court for the Southern District of New York, US Attorney Damian Williams alleged Kwon conspired with others to commit money laundering.

According to the US Attorney, the Terraform co-founder facilitated transactions of more than $10,000 on the platform “knowing that the property involved in certain financial transactions represented the proceeds of some form of unlawful activity.”

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Man Loses $188,000 in Crypto Scam to Fraudster Posing As Childhood Friend: Report

SEC nets record $8.2B from enforcement, mostly from Terraform Labs

Terraform Labs’ near $4.5 billion settlement with the SEC has contributed to a record year for the agency’s financial penalties.

The United States Securities and Exchange Commission hit a new record for penalties and fines from its enforcement actions in the fiscal year 2024 — due mainly to a massive settlement with crypto firm Terraform Labs.

The agency net $8.2 billion in financial remedies for the year ending Sept. 30 — “the highest amount in SEC history,” it said in its Nov. 22 annual report — despite the number of cases declining 26% from last year to 583.

Over half of the total came from the SEC’s court win against Terraform and former CEO Do Kwon, who paid a $4.47 billion settlement after being found liable for fraud over its blockchain ecosystem’s collapse in 2022 that wiped billions of dollars.

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Man Loses $188,000 in Crypto Scam to Fraudster Posing As Childhood Friend: Report

Terraform wallet moves $62M BTC as Do Kwon remains in legal limbo

Awaiting extradition to either the US or South Korea, Do Kwon could have had access to the Terraform Labs wallet containing more than 1,075 BTC.

A wallet reportedly associated with Terraform Labs and one of its co-founders, Do Kwon, has moved $62 million worth of Bitcoin to a different address.

According to data from blockchain analytics firm Arkham Intelligence, on Sept. 2, Terraform moved more than 1,075 Bitcoin (BTC) — roughly $62 million at the time of publication — from one of its wallets. It’s unclear if Kwon, currently awaiting extradition from Montenegro, was responsible for the transfer.

The Terra ecosystem collapsed in 2022, with authorities from the United States and South Korea filing charges against Kwon and some of his associates for their alleged role in the platform’s downfall. In 2023, Kwon was arrested in Montenegro on unrelated charges and sentenced to four months in prison.

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Man Loses $188,000 in Crypto Scam to Fraudster Posing As Childhood Friend: Report

Montenegrin Supreme Court Pauses Do Kwon Extradition to South Korea: Report

Montenegrin Supreme Court Pauses Do Kwon Extradition to South Korea: Report

The Supreme Court of the southeastern European nation of Montenegro is again postponing Terra (LUNA) co-founder Do Kwon’s extradition to South Korea. According to a report from Montenegrin news outlet Vijesti, Montenegro’s Supreme Court has halted the extradition due to a request for “protection of legality” brought forth by Kwon’s camp. According to a statement […]

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Man Loses $188,000 in Crypto Scam to Fraudster Posing As Childhood Friend: Report

US judge approves Terraform’s $4.5B settlement with SEC

A New York district court judge has rubber-stamped Terraform Labs and Do Kwon’s nearly $4.5 billion settlement with the SEC.

A United States district court judge has signed off on the $4.5 billion settlement between Terraform Labs, its founder Do Kwon and the Securities and Exchange Commission.

New York District Court Judge Jed Rakoff approved the deal on June 13, which will see Terra and Kwon pay $4.47 billion in fines and penalties and be essentially banned from the crypto industry.

In all, Terraform will pay disgorgement fines of roughly $3.6 billion, a civil penalty of $420 million and prejudgement interest of nearly $467 million.

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Man Loses $188,000 in Crypto Scam to Fraudster Posing As Childhood Friend: Report

Crypto Company Terraform Labs Files for Chapter 11 Bankruptcy Protection

Crypto Company Terraform Labs Files for Chapter 11 Bankruptcy Protection

Collapsed crypto company Terraform Labs has filed for Chapter 11 bankruptcy in the United States. The firm submitted a voluntary petition to the U.S. Bankruptcy Court for the District of Delaware. The document, which was filed on Sunday, indicates Terraform Labs has between 100-199 creditors, owns between $100,000,001-$500 million in estimated assets, and owes between […]

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Man Loses $188,000 in Crypto Scam to Fraudster Posing As Childhood Friend: Report

US Judge Says Terraform Labs and the Disgraced Crypto Project’s Founder Do Kwon Sold Unregistered Securities

US Judge Says Terraform Labs and the Disgraced Crypto Project’s Founder Do Kwon Sold Unregistered Securities

A US judge has ruled that collapsed crypto company Terraform Labs and its founder Do Kwon offered and sold two digital assets as unregistered securities. The U.S. Securities and Exchange Commission (SEC) and Terraform Labs both requested summary judgment in an ongoing fraud case. The SEC alleges the company and Kwon facilitated a multi-billion dollar […]

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Man Loses $188,000 in Crypto Scam to Fraudster Posing As Childhood Friend: Report

Do Kwon and Terraform Labs ask judge to toss SEC’s lawsuit

Do Kwon, the co-founder now-collapsed Terraform ecosystem maintains he and his firm did not skirt U.S. securities laws.

Terraform Labs co-founder Do Kwon has requested a United States district judge to reject the securities and fraud suit from the federal securities regulator, claiming it has failed to prove they did anything wrong.

In an Oct. 27 filing to a New York District Court, lawyers for Kwon and Terraform argued its cryptocurrencies Terra Luna Classic (LUNC), TerraClassicUSD (USTC), Mirror Protocol (MIR) and its Mirrored Assets (mAssets) that reflect stocks on-chain are not securities as the Securities and Exchange Commission alleged.

“After two years of investigation, the completion of a discovery period that resulted in the taking of more than 20 depositions, and the exchange of over two million pages of documents and data, the SEC is evidentiarily no closer to proving that the Defendants did anything wrong,” the lawyers wrote.

They added the “evidence does not exist to support many of the SEC’s claims” and asserted the regulator “knew some of its allegations were false” — in particular, an allegation that Kwon and Terraform secretly moved millions into Swiss bank accounts for their own gain.

Kwon’s lawyers claimed the SEC is trying to draw parallels between Terraform and FTX. Source: CourtListener

In its suit against Kwon and Terraform filed in February, the SEC claimed the pair sent 10,000 Bitcoin (BTC) to a Swiss financial institution and withdrew $100 million. It also claimed they committed fraud by “repeating false and misleading statements.”

“The SEC knew this allegation was false when it filed this case,” Kwon’s lawyers wrote. ”This is made even worse by the undisputed fact that TFL had no customers, and thus no customer funds.”

The $40 billion Terra ecosystem collapsed in May 2022 after its USTC algorithmic stablecoin lost its U.S. dollar peg.

Related: Terraform co-founder Shin blames protocol for collapse during trial in S. Korea

Kwon and Terraform also moved to exclude the opinion of the SEC’s experts including a report from Rutgers University economics professor Bruce Mizrach which they called “junk science.”

Judge Jed Rakoff, who oversees the case, denied Terraform’s earlier attempt to toss the lawsuit.

Kwon is currently detained in Montenegro and has previously asked the court to reject the SEC’s motion to extradite and interview him in the U.S.

Magazine: How to protect your crypto in a volatile market — Bitcoin OGs and experts weigh in

Man Loses $188,000 in Crypto Scam to Fraudster Posing As Childhood Friend: Report

Terraform Labs contends Citadel Securities had a hand in its stablecoin collapse

Terraform Labs has urged the judge to grant its motion to compel trading data from Citadel Securities, which it says had a hand in the collapse of USTC in May 2022.

Do Kwon-founded Terraform Labs has again pointed the finger at market maker Citadel Securities for its role in an alleged “concerted, intentional effort” to cause the depeg of its stablecoin in 2022.

On Oct. 10, Terraform Labs filed a motion in the United States District Court in the Southern District of Florida to compel Citadel Securities LLC to produce documents relating to its trading actions in May 2022, around the time its stablecoin, now known as TerraUSD Classic (USTC), depegged.

Screenshot from filing from Terraform compelling Citadel to provide additional documents. Source: courtlistener

It contends the May 2022 depeg, when the asset crashed from $1 to $0.02, was caused by "certain third-party market participants” intentionally shorting the stablecoin, as opposed to instability in its algorithm.

“Movant [Terraform] contends that the market destabilization that occurred did not result from instability in the algorithm underlying the UST stablecoin,” said the firm in its motion.

“Instead, Movant contends that the market was destabilized due to the concerted, intentional effort of certain third party market participants to “short” and cause UST to depeg from its one dollar price.”

The motion also cites “publicly available evidence” suggesting that Citadel head Ken Griffin intended to short the stablecoin around the time of the depeg.

“There is publicly available evidence suggesting that the head of the Citadel Entities, Ken Griffin, intended to short UST at or about the time of the May 2022 depeg.”

The filing cited a screenshot from a Discord channel chat in which a pseudonymous trader had lunch with Griffin, who allegedly said “They were going to Soros the f*** out of Luna UST,” presumably in reference to George Soros' trading strategies — centered around highly leveraged, one-way bets.

Citadel Securities has however previously denied trading the TerraUSD stablecoin in May 2022, according to Forbes.

Cointelegraph contacted Citadel for additional comment but did not receive an immediate response.

Related: Do Kwon says SEC’s extradition request is impossible

In its motion, Terraform argues that the documents are crucial for its defense in the lawsuit filed by the U.S. Securities and Exchange Commission in February, which alleges Terraform Labs and its founder, Do Kwon, had a hand in “orchestrating a multi-billion dollar crypto asset securities fraud.”

“This defense will be substantially impaired if Citadel Securities is successful in withholding this limited information,” it stated.

If the court refuses to compel Citadel to produce the trading documents, Terraform requested the matter be transferred to the U.S. District Court for the Southern District of New York for decision by Judge Rakoff.

In July, Terraform Labs sought permission from a judge to subpoena data from bankrupt crypto exchange FTX, also claiming the information could help its defense.

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Man Loses $188,000 in Crypto Scam to Fraudster Posing As Childhood Friend: Report