First Mover Americas: SEC Suing Do Kwon for Misleading Investors

The latest price moves in crypto markets in context for Feb. 17, 2023.

AccessTimeIconFeb 17, 2023 at 1:01 p.m. UTC
Updated Feb 17, 2023 at 4:26 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

This article originally appeared in First Mover, CoinDesk’s daily newsletter putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

Latest Prices

1,130
−24.8 2.1%
$23,811
−655.5 2.7%
$1,667
−13.3 0.8%
S&P 500 futures
4,071.00
−28.8 0.7%
FTSE 100
7,985.26
−27.2 0.3%
Treasury Yield 10 Years
3.84%
0.0
BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)

Top Stories

The U.S. Securities and Exchange Commission (SEC) is suing Terraform Labs, the company behind failed stablecoin terraUSD (UST), and its co-founder Do Kwon for fraud and the sale of unregistered securities, among other claims. The SEC alleged that investors were misled about the stability of the algorithmic stablecoin UST, the depegging of which from the U.S. dollar “spelled doom for the entire Terra ecosystem.” The collapse of terraUSD last year sent shockwaves throughout the cryptocurrency industry and was followed by a wave of bankruptcies of prominent firms, and ultimately the meltdown of crypto exchange FTX in November.

Do Kwon (Terra, modified by CoinDesk)
Do Kwon (Terra, modified by CoinDesk)

DeFi protocol Platypus Finance suffered a flash-loan attack worth over $8.5 million resulting in its stablecoin USP losing its dollar peg and falling to 48 cents. The hacker had exploited a flaw in the USP solvency check mechanism, making Platypus smart contracts think USP was fully backed. “They used a flash loan to exploit a logic error in the USP solvency check mechanism in the contract holding the collateral,” Platypus tweeted. A flash loan is a form of unbacked borrowing used on decentralized finance lending protocols to make quick profits when opportunities arise. Hackers make use of them to destabilize and drain tokens from such protocols.

Bankrupt crypto lender BlockFi is looking to dismiss the bankruptcy case of Emergent Fidelity Technologies, a shell company 90% owned by FTX founder Sam Bankman-Fried. Emergent is the owner of 56 million shares of Robinhood Markets (HOOD) and little else. BlockFi is claiming legal access to the stock, worth nearly $600 million at HOOD’s current price, as security for a loan made in November. By filing for bankruptcy in the U.S., Emergent liquidators are making things more complex, according to BlockFi, describing it as a “futile act,” given that the company has no employees, income or business. The Robinhood shares were seized by the U.S. Department of Justice in January as part of its investigation of fraud against Bankman-Fried.

Chart of the Day

(Glassnode, Decentral Park Capital"
(Glassnode, Decentral Park Capital"
  • The chart shows bitcoin's STH-SOPR indicator, which shows the degree of realized profit and loss for all coins moved on-chain that have a lifespan of less than 155 days.
  • The indicator has bounced from 1.00. Values greater than 1 suggest coins moved are, on average, selling at a profit (the price sold is greater than the price paid).
  • "BTC STH-SOPR bouncing off 1. A good signal that the asset has entered a more prolonged bullish period as short-term traders become more constructive," Decentral Park Capital's portfolio manager Lewis Harland, said in a market update.

- Omkar Godbole

Trending Posts


Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Jamie Crawley

Jamie Crawley is a CoinDesk news reporter based in London.

Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.