SEC accuses TFL CEO of withdrawing $238 million from the platform

The head of the company managed to cash out about 100 million of the withdrawn funds in a Swiss bank

17.02.2023 - 15:00

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2 min

What’s new? Terraform Labs (TFL) founder Do Kwon and his company’s employees withdrew more than 10 000 bitcoins (about $238 million as of February 17) from their project, cashing out more than $100 million through a Swiss bank. That is according to a February 16 US Securities and Exchange Commission (SEC) filing.

Link to the document

What else is known? The SEC filed the lawsuit against TFL and Do Kwon for “orchestrating a multi-billion dollar crypto asset securities fraud” on February 16. According to the Commission, they misled investors about a number of issues, including the stability of the algorithmic stablecoin UST. They are accused of fraud, selling unregistered securities and swaps based on them. The total damages, according to the SEC lawsuit, exceed $40 billion.

In this, Do Kwon himself is on the run and has repeatedly denied the charges. In September 2022, the South Korean prosecutor’s office issued a warrant for his arrest, and Interpol put him on an international wanted list. Kwon’s current whereabouts are unknown, but according to South Korean intelligence he is in Serbia. The country’s authorities are negotiating his extradition.

Previously, analysts at South Korea’s Digital Asset reported that Kwon had withdrawn large amounts of bitcoin from an address belonging to the Luna Foundation Guard, which was created to support the Terra blockchain ecosystem.

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