Do Kwon allegedly transferred 10000 Bitcoins from Swiss Bank
Credits: Watcher Guru

Do Kwon allegedly transferred 10000 Bitcoins from Swiss Bank

The United States Securities and Exchange Commission (SEC) yesterday announced charges against Do Kwon, the founder of Terraform Labs. The regulator’s complaint is that Kwon and his company orchestrated a scheme that saw him defraud investors. Do Kwon is the founder of Terra, the crypto project that had a native token LUNA and stablecoin Terra USD (UST). He’s on the run and the latest news is that he cashed out massive amounts of Bitcoin (BTC) following the collapse of UST and LUNA.

The complaint states that the SEC is charging Kwon and Terraform Labs of fraud related to the cryptocurrencies created by them, which led to investor losses of at least $40 billion, as well as storing more than 10,000 BTC in a cold crypto wallet away from any crypto exchange. Furthermore, the agency said that the defendants have been transferring (and continue to transfer) these assets from the wallet “on a periodic basis since May 2022,” sending them to an undisclosed financial institution based in Switzerland and converting them into cash.

Do Kwon allegedly paid out $100 million worth of Bitcoin through the Swiss  Bank.
credits: Coinunited

The SEC wants Kwon and Terraform Labs to be barred from dealing in crypto, and for them to pay penalties for illegally dealing in securities. SEC Chair Gary Gensler said in a press release “This case demonstrates the lengths to which some crypto firms will go to avoid complying with the securities laws, but it also demonstrates the strength and commitment of the SEC’s dedicated public servants.”

The SEC also alleged Kwon misled investors about the stability of its UST stablecoin. According to the complaint, the company also lied to investors that the Terraform blockchain was being used by a popular Korean mobile payment app called “Chai.” Instead, the SEC said Terraform Labs “replicated Chai payments on the Terraform blockchain” to make it seem like there was far more adoption for the tech than there really was.

Do Kwon Archives
Credits: The News Crypto

However, the agency did not reveal the name of the Switzerland-based bank involved in the complaint. On Thursday, the U.S. Securities and Exchange Commission sued Terraform Labs and its co-founder Do Kwon. The agency alleged that Terraform and Kwon misled investors on a number of issues, including who was using TerraUSD for payments, and labeled both the yield-bearing Anchor Protocol and the LUNA token as “crypto asset securities.”

Resultantly, the SEC is charging Terraform and Kwon for fraud, selling unregistered securities, selling unregistered security-based swaps, and other related claims. The regulator disclosed that between June 2022 and February, over $100 million in cash has been withdrawn from the Swiss Bank.

The SEC has called for the trial of Do Kwon and Terraform for allegedly operating a fraudulent scheme that wiped out over $40 billion from the crypto market in May 2022. Do Kwon’s whereabouts remain unknown as authorities around the world have placed him on red alert. South Korean officials confirmed to have made a trip to Serbia following an intelligence report on his possible location.