In Thursday’s indictment, the Manhattan US Legal professional’s workplace alleged Kwon misled traders in 2021 about TerraUSD, a so-called stablecoin designed to take care of a price of US$1.
Kwon allegedly informed traders a pc algorithm generally known as “Terra Protocol” had restored the coin’s worth when it slipped under its peg in Might 2021, when in truth he organized for a high-frequency buying and selling agency to secretly purchase tens of millions of {dollars} of the token to artificially prop up its value.
Prosecutors stated that false declare and others drove retail and institutional traders to purchase Terraform merchandise and enhance the worth of Luna, a extra conventional token developed by Kwon that fluctuated in worth however was carefully 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 stated.
When TerraUSD’s worth started sliding once more in Might 2022, the buying and selling agency warned that propping it up “wasn’t so easy this time,” based on the indictment.
TerraUSD and Luna crashed that month, dragging down the worth of different cryptocurrencies, together with bitcoin, and brought about wider havoc within the crypto market.
Prosecutors didn’t determine the buying and selling agency. SEC attorneys stated of their civil case that Leap Buying and selling had propped up TerraUSD in Might 2021.
Leap didn’t instantly reply to requests for remark.