TronWeekly

Crypto World News

You are here: Home / Archives for Terraform Labs

Terraform Labs

Terraform’s Bold Accusation: Citadel’s $0.02 TerraUSD Depeg Conspiracy Unveiled

by

Terraform Labs, the blockchain company founded by Do Kwon, has once again pointed fingers at Citadel Securities, a major market maker, for its alleged role in the intentional depegging of TerraUSD (UST) stablecoin in May 2022. Terraform Labs recently filed a motion in the United States District Court in the Southern District of Florida, demanding that Citadel Securities produce documents related to their trading actions during the destabilization of TerraUSD.

The May 2022 depeg incident saw TerraUSD plummet from $1 to a mere $0.02, leaving many investors and market participants bewildered. Terraform Labs contends that this drastic depeg was not due to any inherent instability in TerraUSD’s algorithm, as originally thought. Instead, they argue that it was the result of a coordinated effort by certain third-party market participants to short the stablecoin, causing it to depeg from its $1 value.

Source: CourtListener

The motion further highlights “publicly available evidence” suggesting that Ken Griffin, the head of Citadel Securities, intended to short TerraUSD around the time of the depeg. This evidence includes a Discord chat screenshot in which a pseudonymous trader claimed Griffin discussed “Soros-ing” Luna UST, possibly alluding to George Soros’ trading strategies focused on highly leveraged, one-way bets.

However, Citadel Securities has previously denied involvement in trading TerraUSD during the critical period in May 2022, according to Forbes.

Terraform’s Defense: Vital Trading Documents at Stake

Terraform Labs asserts that these trading documents are essential for its defense against a lawsuit filed by the U.S. Securities and Exchange Commission in February. The lawsuit accuses Terraform Labs and Do Kwon of orchestrating a multi-billion-dollar crypto asset securities fraud. The company emphasizes that their defense would be significantly compromised if Citadel Securities successfully withholds the requested information.

Should the court decline to compel Citadel Securities to produce the trading documents, Terraform Labs has requested the matter be transferred to the U.S. District Court for the Southern District of New York for a decision by Judge Rakoff.

In a bid to strengthen their defense, Terraform Labs had previously sought permission from a judge to subpoena data from the now-bankrupt crypto exchange FTX, suggesting that this information could also play a crucial role in their legal battle.

The ongoing legal dispute between Terraform Labs and Citadel Securities sheds light on the complexities of the crypto market and the regulatory challenges faced by participants in the digital asset space. As the case unfolds, it will be interesting to see how the court navigates the intricacies of the TerraUSD depeg and the potential involvement of market players in its destabilization.

Terraform Labs Co-Founder Do Kwon Pleads Not Guilty In Montenegro Forged Documents Case

by

Terraform Labs Co-Founder Do Kwon, arrested in Montenegro based on an international warrant and accused by local authorities of using fake travel documents, pleaded not guilty during his court appearance, according to a Bloomberg report.

Do Kwon, the founder of Terra, who had been evading authorities for some time, was recently apprehended by Montenegro officials. The government of Montenegro has accused him of forging local documents and is presently awaiting extradition. Despite the crypto community’s contemplation on the collapse of Terra, which occurred a year ago, Kwon refuted certain allegations against him.

Recent reports suggest that Do Kwon pleaded not guilty at the Basic Court in Podgorica, Montenegro. Kwon and Han Chang-Joon, the former CFO of Terra, was detained based on an international warrant and found to possess a South Korean passport and counterfeit Belgian and Costa Rican travel documents. Since the duo’s possession of forged Belgian and Costa Rican passports was discovered, they have been charged with the offense.

It is important to note that using forged documents is a criminal offense in the region. Individuals found guilty of this can face imprisonment of up to five years. Branko Andjelic, the Terra duo’s defense lawyer, proposed releasing them on bail of 400,000 euros, or $437,240 each. However, prosecutor Haris Sabotic rejected this suggestion, claiming they have adequate financial means but no intention of remaining in Montenegro.

Although Do Kwon and Han Chang-Joon assert the validity of their Costa Rican passports, only time will determine the authenticity of their claim. The subsequent court hearing for the lawsuit has been set for June 16.

Terra Co-Founder Do Kwon To Stand Trial In South Korea

Daniel Shin, the co-founder of Terra, has been charged with multiple offenses related to the network’s downfall. He and seven other individuals have been accused of fraud, embezzlement, and breach of duty. The Seoul Southern District Court of South Korea has scheduled the first trial on May 26 to address these allegations. It’s worth mentioning that South Korea is also preparing for the extradition of Do Kwon.

Related Reading: | Terra’s Do Kwon Challenges US Extradition: Report |

Source: Tradingview.com

Terraform CEO’s Crypto Billions Discovered In Swiss Bank SEC Pursues Legal Action

by

Terraform Labs (TFL) CEO Kwon Do-hyung and TFL’s Signum bank accounts are worth billions of won. In February, the SEC filed a lawsuit against Kwon and TFL, alleging an unregistered securities issue and accused the CEO of moving 10,000 BTC (about 300 billion won) to a Swiss bank, Signum.

Signum, the world’s first virtual asset bank, was founded in 2017 in Zurich, Switzerland. The Financial and Securities Crime Joint Investigation Unit of the Seoul Southern District Prosecutor’s Office (Head Dan Seong-han) acknowledged on April 25 that they are still following Bitcoin owned by Luna Foundation Guard (LFG), with some already converted into cash and stored in the Signum account.

Terraform Labs co-founder Daniel Shin was indicted on Tuesday. The prosecution discovered that the $100 million sent to Signum was used for attorney’s fees. Billions of won are still in the account.

The prosecution also stated that freezing the Signum account would be contingent on the Swiss government and banks deciding which freeze request, from South Korea or the United States, should be processed first.

Shin and seven others were accused of illicit trading, and two more were charged with breach of trust. According to Bloomberg, prosecutors stated at a news conference that everyone involved is tied to Terra.

Terra Co-Founder Daniel Shin’s Assets Frozen Amidst Alleged Financial Wrongdoings

The frozen assets are part of a “restitution” request allowed in court to compensate victims, not a “forfeiture” motion just rejected to deposit the funds in the national treasury.

The accusation comes just one day after the Seoul Southern District Court declared that Terra Classic, as Luna was renamed after its implosion, is not a security under Korea’s Capital Markets Act. Nonetheless, prosecutors have asked the Supreme Court of Korea to rule on the case.

Shin’s attorneys maintained today that he left the Terra project in 2020 and has not been involved in operations since. The prosecutors’ “premise that Shin continued with the business although warnings from financial authorities are incorrect,” according to Shin’s lawyers, according to Korea Daily

Global Legal Implications

Following the arrests of Terraform Labs co-founder Do Kwon and chief financial officer Han Chang Joon in Montenegro last month, the legal fallout from the Terra tragedy now spans multiple countries.

Both the United States and South Korea have requested Kwon’s extradition, but he and Joon must first face charges in the country where they were arrested for using false passports.

Meanwhile, Kwon has requested that the Securities and Exchange Commission (SEC) drop the accusations against him because Terra tokens are not securities.

Related Reading: | Binance: Terra Classic’s Existing Deposit Addresses Will Be Discontinued |

Source: Tradingview.com

Terraform Labs Founder Do Kwon Faces Fraud Charges After Montenegro Arrest

by

The founder of Terraform Labs, Do Kwon, has been arrested by Montenegrin police at an airport with falsified documents. This news comes after Kwon’s location had been a mystery for months, and he had been on an Interpol wanted list in connection with last year’s TerraUSD collapse. Kwon is also facing an investigation in South Korea and has already faced civil charges filed by the U.S. Securities and Exchange Commission (SEC).

Allegations of Market Manipulation & Fraud On Terraform Labs Founder 

Federal prosecutors in New York have charged Kwon with fraud, conspiracy to defraud, commodities fraud, securities fraud, wire fraud, and conspiracy to engage in market manipulation. 

The complaint alleges that Kwon made a number of “untrue and misleading statements of material fact” over several years, citing T.V. appearances and tweets from accounts tied to Terraform Labs.

According to the filing, Kwon sought the assistance of a U.S. trading and investment firm to manipulate the market price of UST, which the firm reportedly provided. This allegation was also made by the SEC in its complaint.

According to Filip Adzic, the interior minister of Montenegro, Kwon was arrested with falsified documents at an airport earlier on Thursday. The Korean National Police Agency later confirmed his identity.

Kwon’s arrest represents a significant milestone in the ongoing investigation, as he has been the subject of multiple inquiries and was even the subject of an Interpol red notice. 

The collapse of the TerraUSD (UST) stablecoin and its $40 billion ecosystem last year sent shockwaves through the crypto markets, and Kwon was implicated in the incident.

The news of Kwon’s arrest was announced on Twitter by Filip Adzic, the minister of interior of Montenegro. Adzic’s account is followed by the official account of the prime minister of Montenegro, Dritan Abazovic, who retweeted the announcement. However, the account Adzic is unverified, and official confirmation of Kwon’s identity is still awaited.

Kwon’s extradition is being demanded by South Korea, the USA, and Singapore, and the Department of Justice has confirmed its intention to seek his extradition to the U.S.

This arrest represents a significant step forward in the investigation into the collapse of terraUSD and its associated ecosystem. The impact of this development on the broader cryptocurrency market is yet to be determined, but it is expected to attract close scrutiny from investors and regulators.

Related Reading | Coinbase CEO’s Stock Sell-Off Amidst Wells Notice Raise Eyebrows 

Terraform Labs’ Co-founder to be prosecuted by S.Korea

by

Terraform Labs has been in the news for a while now. Earlier this month, according to reports, South Korean authorities had summoned Daniel Shin, a co-founder of Terraform Labs, to appear at an investigation this week about allegations that he unfairly profited from the sale of LUNA [now LUNC] tokens.

Yonhap, a South Korean news agency, is now reporting that Shin’s arrest is being sought by the prosecution. According to reports, Shin is accused by the prosecution of obtaining illicit profits while selling $105 million of LUNA at a market high without telling investors. He’s also accused of breaking the Electronic Financial Transaction Act by utilizing client information from Chai, a different business he oversaw, to advertise Luna.

Previously, on the 15th, the prosecution requested a collection preservation freeze before the conviction was confirmed to stop the sale of the property suspected of having been acquired through criminal activity prior to prosecution for the new representative property, which was quoted by the court and is worth about 140 billion won.

Additionally, CEO Shin is charged with harming the business by pushing Luna and the stablecoin Terra while exploiting customer data and monies held by Chai Corporation.

The Personal Information Protection Act and other pertinent rules are followed in the secure management of customers’ personal information, according to a notice on the homepage of Chai Corporation.

Shin Refutes Ties With Terraform Labs

Shin has repeatedly said that he severed connections with Do Kwon and Terraform Labs in 2020. He then went on to found Chai Corporation, a provider of payment technology, where he is presently CEO and founder.

According to the most recent source, authorities have now charged the former Terra official with “breach of duty, as Chai Corporation’s customer information and finances were allegedly used to promote Terra’s stablecoin and Luna cryptocurrency.”

He will also be questioned about if he knew about insider trading and price manipulation that Terraform Labs allegedly carried out to raise the price of LUNA.

Do Kwon also has a warrant out for his arrest, however it is still unknown where he is. Exiting the country has been prohibited for key Terraform Labs personnel and former workers.

Conflicts Over Terra Token Treatment Due To Lack Of Regulations

by

The collapse of Terra happened months ago. However, the aftereffect is still present in the crypto-hallways. verse’s The South Korean authorities are currently making every attempt to apprehend Do Kwon, the project’s originator.

Authorities in South Korea are having difficulty compiling a compelling case against the token’s founder Do Kwon. According to a Bloomberg story, disagreements about how to manage Terra tokens are emerging as a result of the lack of laws.

The prosecutor’s office recently asked that a Terraform Labs ecosystem participant be jailed. The court, however, turned down their motion. Despite what the prosecutors asserted, the judge concluded that it is still unclear if the defendant truly violated the South Korean Capital Markets Act.

The prosecution seems to mention the difficulties of the case while implying that it is working hard to prove the case. The authorities insist that further research is ongoing despite the lack of specific restrictions.

Terra Chief’s Whereabouts Still Unknown?

Do Kwon, the chief of Terra, is charged with breaking the Capital Markets Act, while he insists that he did nothing illegal. Kwon is the subject of an Interpol and local South Korean authorities’ arrest warrant. Kwon’s whereabouts are still a mystery.

Kwon, who continues to maintain his innocence, has received a red alert from Interpol. Furthermore, Kwon asserted that the red notice is not an arrest warrant in a recent interview with Laura Shin. When asked where he lived, Kwon also declined to give his address. Rumors suggest that he might be in Dubai, though.

Additional charges against Kwon have not yet been made public by the prosecution. The Terra disaster resulted in losses for a total of 280,000 persons, who claimed compensation. In a lawsuit brought by the lawyer for the victims, Kwon was charged with fraud and illegal fundraising.

On the other hand, today’s crypto markets experienced a small reprieve, and the Terra tokens also experienced a rise. At the time of writing, Luna Classic (LUNC) was priced at $0.00024929 with a daily hike of 8.0%. However, LUNA was priced at $2.47 with a rise of 4.2% over the last 24 hours.

Terra founder issued with arrest warrant

by

Authorities from all across the world have been looking into Terraform Labs, its founder Do Kwon, and other connected parties. Terra [LUNA] and its native stablecoin UST lost the majority of their value earlier this year. Investors suffered enormous losses as a result of this. The market as a whole got tumultuous as a result of the same having a knock-on effect on the larger ecosystem.

Do Kwon, Founder of Terra

The most recent development indicates that South Korean officials aim to detain Terra’s creator Do Known by issuing a warrant for his arrest. According to a recent Bloomberg report:

“The court in Seoul issued a warrant for Do Kwon and five others, according to a text message from the prosecutor’s office.”

Terra in troubled waters

It is important to remember that recent local media reports claimed that South Korean authorities were looking at whether the Terra ecosystems had securities-like traits. Notably, the Seoul Southern District Prosecutors’ Office Terra investigative team was evaluating Luna’s securities capabilities using precedents from other countries.

Authorities reportedly called in virtual asset specialists to hear different points of view. Additionally, they cited the Financial Supervisory Service and other financial authorities as references.

They stated in their report from yesterday that Luna and Terra could face charges of breaking the Capital Market Act for unfair trade, such as market price manipulation, if the prosecution determines that they have securities properties. According to Bloomberg, who confirmed the trigger for the warrant’s issue,

“A local newspaper earlier reported that the warrant was related to a violation of capital market rules.“

According to  Kim Jeong-Cheol, an advocate from Woori Law Firm,

“Currently, virtual assets are not recognized as securities, so the Capital Market Act does not apply. In a situation where the discussion has progressed considerably, there is a high possibility that the Luna-Tera case will become Korea’s ‘leading case’ no matter what charges are indicted.”

In addition, Kim Dong-hwan, Director of blockchain consulting business Blitz Labs, stated,

“In 2018, the investigative authorities only investigated Coinone’s margin trading allegations, but since then, no one has done anything. Therefore, if the public authorities look into it, it will inevitably have a debilitating effect.”

It appeared up until this point that Terra and its CEO were being cautiously viewed by banking authorities. The issuing of the most recent arrest warrant, however, suggests a change in position.

Terra co-founder’s home raided by S.Korean prosecutors

by

While the Terra collapse has stirred confusion in the Crypto world, South Korean officials are determined to probe fraud charges of the same.

According to a story in the Korean media, authorities on Wednesday conducted a raid at the Seoul residence of Daniel Shin, the co-founder of Terraform Lab.

Terra co-founders Daniel Shin and Do Kwon

Additionally it was stated that the raid was carried out as part of a larger inquiry into claims that fraud was to blame for the collapse of the stablecoin.

In May, the stablecoin abruptly deviated from its peg to the US dollar, triggering a cascade that affected the whole industry and led to the overexposure of a number of hedge funds and exchanges. A complaint was made against the founding company and co-founder Do Kwon in the same month by several investors in the South Korean-based Luna (LUNA) cryptocurrency, accusing them of fraud and breaking regional securities rules.

Terra’s collapse caused havoc in the lives of its employees

Prosecutors imposed a travel ban on a large number of the firm’s associates, including former employees, in June. The office did not identify the individuals subject to the one-month travel ban, although they may include current and former employees as well as developers. In order to protect their ongoing investigation, prosecutors declined to offer more information.

Furthermore, the collapse of TerraUSD and Luna, according to research by the Bank of Korea, South Korea’s central bank, was a major reason why the global currency market shrank by more than 40% from late last year when its market value had risen to almost $2.3 trillion. The recent increase in the U.S. Federal Reserve’s benchmark interest rate to combat inflation has also aided in the decline by driving away investors from risky assets, according to the bank.

According to Yonhap News Agency, authorities looking into a fraud case related to the downfall of algorithmic stablecoin also conducted raids, earlier this week, at seven cryptocurrency exchanges in South Korea.

According to the report, eight private residences and business locations were searched along with Bithumb, Upbit, Coinone, and four other local exchanges.

In order to determine if the founder of the Labs, Do Kwon, is responsible for purposefully causing the collapse of UST and LUNA, investigators are currently grabbing evidence from the raids.

Terraform labs employee investigated by S.Korean police for alleged BTC fraud

by

According to a Korean news site, the Seoul Metropolitan Police Agency is reportedly initiating an investigation against a Terraform labs employee who allegedly embezzled Bitcoin, LUNA and Terra company cash, following the disappointing utter collapse of original Terra.

According to the report, the police received information in the preceding period that a person suspected of being a Terraform Labs employee was embezzling business assets, so they sought that the funds be frozen using a virtual currency exchange and then launched an investigation.

However, it has been stated that the link between Terraform Labs CEO Kwon Do-hyeong and embezzlement has yet to be established. A police official said,

“It was intelligence about an employee’s personal embezzlement.”

Furthermore, separately, the Joint Financial and Securities Crime Investigation Team of the Seoul Southern District Prosecutors’ Office had also received and is interpreting evidence of possible violations of the Act on the Regulation of Fraud and Similar Receipts under the Act on the Aggravated Punishment of Specific Economic Crimes, including allegations against CEO Kwon.

Terra’s biosphere crumbled after the Terra UST depegging in May. After a sharp price drop, the original LUNA lost all of its value, causing billions of dollars in losses. Changpeng Zhao, Binance’s CEO, said that the company lost $1.6 billion on its LUNA investment.

New Terra blockchain under-performs

The new Terra blockchain, which has only been operational for a week, is already falling short of expectations. Terra 2.0 went live on May 28 as part of Terra co-founder Do Kwon’s community-approved “Terra resurrection” strategy. The original Terra blockchain was abandoned after its collapse and rebranded as Terra Classic.

LUNA 2.0 got off to a shaky start, losing about 70% of its value in the first 24 hours, as many had predicted. Since then, the price of the LUNA 2.0 coin has remained unchanged. LUNA was trading at $4.49 at the time of publication, down 15.55 percent in the last 24 hours, according to CoinMarketCap statistics. The previous LUNA was trading for around $86 when the TerraUSD (UST) stablecoin lost its dollar parity on May 6.

Terraform Labs Is Reportedly Being Sued for 100 Million Won for Tax Evasion

by

Terraform Labs has been fighting for survival as one after the other; the problems seem to pile up. According to reports, Terraform Labs faces a tax evasion fine of 100 billion won ($78.5 million) from the South Korean authorities.

Do Kwon will face charges for reported tax evasion and will have to pay a penalty of 100 billion won ($78.5 million) for failing to pay corporate tax, according to South Korean news agency Naver. Kwon was rumored to be considering liquidating the company and relocating to Singapore due to his dissatisfaction with the country’s tax policies.

Terraform Labs were reportedly trying to evade tax payments

According to the news agency, Terraform Labs was attempting to liquidate the company and relocate its headquarters to another country. Many people were suspicious of the decision, believing it was a ruse to avoid paying taxes. According to the news agency’s sources, Do Kwon was notified by the National Tax Service that he owed 100 billion won ($78.5 million) in taxes.

Ancore and Terraform Labs had been probed by the National Tax Service. Corporate and income tax evasion lawsuits were filed against the corporations.

Do Kwon also owned a 92 percent share in Terra Singapore, according to a separate inquiry. However, the company’s chairman, Shin, ignored any ties to Terraform Labs. Later, it was discovered that he possessed an 8% investment in Terraform Labs.

Last October, the National Tax Service announced an investigation into Terra Virgin, which resulted in a 4.66 billion won income tax penalty. Terra Virgin is a wholly-owned subsidiary of Terra Singapore.

The tax service also discovered that Terra Virgin and Do Kwon sent free LUNA to LFG, a Singapore-based company. Terraform Labs was nabbed in the midst of transferring LUNA to avoid paying taxes, according to the news source.

Because the corporations were regarded as domestic firms, the entire decision to levy the tax was made. Despite the fact that the companies were founded and run in Singapore, the actual administration of the companies is based in Korea.