SEC Investigating Company Behind TerraUSD Stablecoin: Report

The digital currency collapsed in dramatic fashion last month, functionally losing all of its value.

AccessTimeIconJun 9, 2022 at 4:59 p.m. UTC
Updated Jun 9, 2022 at 5:46 p.m. UTC

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

The U.S. Securities and Exchange Commission (SEC) is looking into whether Terraform Labs – the Singapore-registered firm that created the terraUSD (UST) stablecoin and luna (LUNA) token – violated U.S. laws regarding how it marketed the crypto coins, Bloomberg reported Thursday, citing a person familiar with the matter.

Terra and luna functionally lost all of their value last month. Terraform tried relaunching luna, creating a new token and rebranding the original to luna classic (LUNC).

According to Bloomberg, members of the SEC’s Division of Enforcement are investigating whether investor protection rules were broken through Terraform's marketing of the tokens.

The agency was already investigating Terraform founder Do Kwon in connection with his role in building the Mirror Protocol, which allows users to trade tokens representing synthetic stocks.

Terraform Labs did not immediately return CoinDesk's request for comment. Kwon told Bloomberg that he was not aware of any SEC probes into UST and had not heard from the agency.


Read more about

DISCLOSURE

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

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

CoinDesk - Unknown

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

Trending

1
CoinDesk - Unknown
Voyager Seeks Bankruptcy Protection Amid Crypto Credit Crisis

The Toronto-based lender filed for Chapter 11 bankruptcy in New York late Tuesday.

CoinDesk - Unknown
2
CoinDesk - Unknown
Binance Resumes Local Currency Deposits with Brazilian Payment System Pix

Withdrawals should be resumed “shortly,” said the company, which had suspended that feature on June 17.

CoinDesk - Unknown
3
CoinDesk - Unknown
Celsius Repays $183M on DeFi Exchange Maker, Gets Back Collateral, Blockchain Data Shows

The troubled crypto lender paid down $183 million of its debt to the decentralized exchange Maker, blockchain data shows, possibly in a bid to recover bitcoin-linked collateral that otherwise would remain trapped.

CoinDesk - Unknown
4
CoinDesk - Unknown
First Mover Asia: Crypto Game Consoles Aren’t Needed as Web3 Gaming Has Workers, Not Gamers; Bitcoin Dips, Then Regains Its Perch Above $20K

Studios are raising significant amounts of capital, but they must build games that do a better job of engaging users; ether and most other major cryptos rise.

CoinDesk - Unknown