Terra Founder Cashed Out 10K BTC via Swiss Bank: SEC
- Do Kwon cashed out 10,000 Bitcoin (BTC), claims the United States Securities and Exchange Commission (SEC) in its complaint.
- The 10,000 BTC were sold for cash by the founder of the Terra ecosystem using a Swiss bank.
- The crypto entrepreneur cashed out more than $100 million worth of BTC between “June 2022 and the date of this complaint.”
- The 10,000 BTC were transferred from a centralized exchange to a cold storage where these tokens lay dormant for a brief period of time.
Do Kwon, the founder of Terraform Labs, the organization responsible for the maintenance and development of the TerraUSD stablecoin (now USTC) and the Terra (now Terra Classic) token, or LUNC, had cashed out almost 10,000 Bitcoin (BTC), the world’s biggest crypto coin, according to a complaint filed by the United States Securities and Exchange Commission (SEC). The regulator has recently started cracking down on crypto firms.
As per a report from Bloomberg, Kwon made use of an unnamed Swiss bank to cash out over 10,000 BTC. The SEC states in its complaint on Feb. 16 that after the collapse of the Terra ecosystem, which was Kwon’s brainchild, the crypto entrepreneur cashed out more than $100 million worth of BTC between “June 2022 and the date of this complaint.”
It is crucial to note that the regulator claims that the 10,000 Bitcoin were transferred from a centralized exchange to cold storage, where these tokens lay dormant for a brief period of time after the collapse of the TerraUSD stablecoin. Interestingly, the Bitcoin holding began moving from the cold storage last year, claims the SEC while adding that a bank in Switzerland was used to swap the BTC for cash.
As reported earlier by Bitnation, the SEC sued Do Kwon and Terraform Labs claiming that the two together operated a fraudulent scheme and offered and sold an “inter-connected suite of crypto asset securities, many in unregistered transactions.” The regulator noted in the complaint that Kwon orchestrated “a multi-billion dollar crypto asset securities fraud” via the Terra stablecoin ecosystem.
“We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for LUNA and Terra USD,” said SEC Chair Gary Gensler. “We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.”
The Terra ecosystem collapsed in the month of May last year when the popularity of the LUNA (now LUNC) token peaked along with its TVL. Moreover, many institutions also had exposure to Do Kwon’s crypto coin and ecosystem. Interestingly, the collapse of the ecosystem led to many crypto firms losing a significant portion of their wealth, and some even filed for bankruptcy.
Furthermore, the location of Kwon has been unknown since last year and as per reports, the crypto entrepreneur was somewhere in Serbia and South Korean prosecutors said that, “We are continuing efforts to locate Kwon, and it’s difficult to confirm anything related to the investigation at this stage.”
“As alleged in our complaint, the Terraform ecosystem was neither decentralized, nor finance. It was simply a fraud propped up by a so-called algorithmic “stablecoin” – the price of which was controlled by the defendants, not any code,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.