Do Kwon: US regulator accuses cryptocrash CEO of fraud

 Do Kwon: US regulator accuses cryptocrash CEO of fraud

US financial regulators have charged failed South Korean cryptocurrency boss Do Kwon and his company Terraform Labs with "orchestrating a multi-billion dollar crypto asset securities fraud".

The Singapore-based company was responsible for the Terra Luna and TerraUSD tokens, which crashed spectacularly last year.

It is estimated that the collapse cost investors more than $40 billion (£33.5 billion).

Mr. Kwon and Terraform Labs did not respond immediately to a request for comment from the BBC.

"We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a variety of crypto asset securities, most notably LUNA and Terra USD," said US Securities and Exchange Commission (SEC) chairman Gary Gensler in a statement.

"We also allege that they committed fraud by making false and misleading statements repeatedly in order to gain trust before causing devastating losses for investors," he added.

Mr. Kwon and his company, according to the SEC, raised billions of dollars from investors by selling them "an interconnected suite of crypto asset securities," with many transactions going unreported.

The SEC also claimed that Mr Kwon and Terraform made repeated claims about the tokens' value increasing and misled investors about the stability of TerraUSD.

However, the value of the token and its associated Luna cryptocurrency fell to near zero in May of last year.

According to blockchain analytics firm Elliptic, investors in TerraUSD and Luna lost an estimated $42 billion globally.

It resulted in a sell-off of major cryptocurrencies like Bitcoin, Ethereum, and Tether. As a result, the term "cryptocrash" became popular on the internet.

"I am heartbroken over the pain my invention has caused you all," Mr Kwon said at the time.

The SEC complaint, which contained additional allegations, did not specify where Mr Kwon was located.

South Korean authorities, who have issued an arrest warrant for Mr Kwon, stated in December that they believed he was in Serbia.

Mr Kwon previously denied being in hiding but did not reveal his location.

"For any government agency that has expressed an interest in communicating, we are fully cooperating and have nothing to hide," he said on Twitter.

Mr. Kwon is facing fraud and capital market law violations charges in his home country of South Korea.