In Thursday’s indictment, the Manhattan US Legal professional’s workplace alleged Kwon misled buyers in 2021 about TerraUSD, a so-called stablecoin designed to keep up a worth of US$1.
Kwon allegedly instructed buyers a pc algorithm generally known as “Terra Protocol” had restored the coin’s worth when it slipped beneath its peg in Could 2021, when actually he organized for a high-frequency buying and selling agency to secretly purchase thousands and thousands of {dollars} of the token to artificially prop up its worth.
Prosecutors mentioned that false declare and others drove retail and institutional buyers to purchase Terraform merchandise and enhance the worth of Luna, a extra conventional token developed by Kwon that fluctuated in worth however was intently linked to TerraUSD, to US$50 billion by the spring of 2022.
“A lot of this development adopted Kwon’s brazen deceptions about Terraform and its know-how,” the indictment mentioned.
When TerraUSD’s worth started sliding once more in Could 2022, the buying and selling agency warned that propping it up “wasn’t so easy this time,” in line with the indictment.
TerraUSD and Luna crashed that month, dragging down the worth of different cryptocurrencies, together with bitcoin, and brought on wider havoc within the crypto market.
Prosecutors didn’t determine the buying and selling agency. SEC legal professionals mentioned of their civil case that Leap Buying and selling had propped up TerraUSD in Could 2021.
Leap didn’t instantly reply to requests for remark.
