Policy
Share this article

SEC Investigating Company Behind TerraUSD Stablecoin: Report

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

By Nikhilesh De
Updated May 11, 2023, 6:19 p.m. Published Jun 9, 2022, 4:59 p.m. 1 min read
The SEC is reportedly probing Terraform Labs. (Danny Nelson/CoinDesk)
The SEC is reportedly probing Terraform Labs. (Danny Nelson/CoinDesk)

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.

RegulationsTerraSEC

More For You

‘The banks will not accept it’: Dimon escalates battle over stablecoin rewards in CLARITY Act debate

By Helene Braun, AI Boost|Edited by Nikhilesh De
10 hours ago
Jamie Dimon (John Lamparski/Getty Images)

JPMorgan CEO Jamie Dimon criticized Coinbase CEO Brian Armstrong and warned the current CLARITY Act framework could ultimately fail, as banks and crypto firms clash over whether stablecoin issuers should be allowed to offer yield-bearing rewards that resemble bank deposits.

What to know:

  • JPMorgan Chase CEO Jamie Dimon criticized Coinbase CEO Brian Armstrong and warned that the latest CLARITY Act draft could fail if lawmakers do not address banks’ concerns over stablecoin regulation on Friday.
  • Dimon argued that the bill would let stablecoin issuers effectively pay interest on deposits without bank-style protections, predicting...
Read full story