FinTech news in Terraform Labs category
The US financial regulator accused Kwon and the Singpoare-based crypto firm of offering and selling an inter-connected suite of crypto asset securities, “many in unregistered transactions” from April 2018 to May 2022.
A Seoul court rejected a request from prosecutors for warrants to detain eight people related to Terraform Labs, including the co-founder of Terraform Labs, Daniel Shin, early investors and former engineers. The Seoul Southern District Prosecutors Office told journalist that it is hard to understand that conclusion as the court knows the seriousness of the allegation and the fact that some of the suspects allegedly made money by selling Luna tokens before the collapse. South Korean prosecutors seek arrest warrants for Terraform Labs co-founder, investors and engineers Prosecutors also suspect Shin used customer data from his separate fintech startup called Chai to promote Luna, violating the Electric Financial Transaction Act.
The Seoul Southern District Prosecutors Office confirmed to journalist that it is seeking arrest warrants for eight people including Terraform Labs co-founder Daniel Shin, three Terraform investors, and four engineers of the cryptocurrencies TerraUSD (UST) and Luna, but did not disclose the identities of most individuals. South Korean prosecutors said Wednesday they have requested arrest warrants for eight people related to Terraform Labs for the alleged fraud as the local authorities widen their investigation into the collapse of the TerraUSD and Luna tokens that wiped tens of billions of dollars from the crypto market earlier this year. The prosecutors suspect Shin of taking illegal profits worth approximately $105 million (140 billion won) by selling Luna at the peak without disclosing properly to investors ahead of the Terra-Luna collapse, according to a local media report Yonhap. Shin’s lawyer said Shin left Terraform two years ago before the Terra-Luna collapse, and that he has no ties with the failure, according to local media.
While some may be hesitant about stablecoins after the UST situation, the dramatic growth in USDC speaks to the fact that the crypto market does understand what a trusted stablecoin could provide, Allaire said. For example, the two largest stablecoins by market capitalization, Tether (USDT) and USD Coin (USDC), are backed by fiat-equivalent reserves issued by centralized firms.
UST is an algorithmic stablecoin that leans on a system of traders who swap between LUNA and UST when the value of UST goes above or below its 1:1 ratio, so it could hold to the U.S. dollar. The impact of this event can have broader implications across the market, as seen earlier this week when bitcoin’s value fell below $30,000 and U.S. Treasury Secretary Janet Yellen pushed for more stablecoin regulation during an annual testimony in front of the Senate Banking Committee on May 10, right in the middle of when Terra’s algorithmic stablecoin, UST, struggled to retain its peg.
Earlier today, U.S. Treasury Secretary Janet Yellen pushed for regulation during an annual testimony in front of the Senate Banking Committee, at a time where Terra algorithmic stablecoin UST struggles to retain its peg. Stablecoins by definition are supposed to be stable and hold their value through a 1:1 ratio that is fixed to an external peg like the U.S. dollar or it can be tied to other assets like UST, which is backed by dollars, but also cryptocurrencies like bitcoin and Avalanche.
Terraform Labs, the organization behind UST, cryptocurrency Luna and Luna Foundation Guard, emptied its treasury wallet of all of its bitcoin, about 42,530 bitcoin, or $1.3 billion, on Monday.
The depegging of UST is forcing LFG to liquidate reserves from both LUNA and bitcoin in order to correct the pegging of UST to $1, Franzen said. If Terraform Labs is selling its bitcoin en masse into a market that’s already selling aggressively, it wouldn’t offer peg support, Jack Melnick, a token researcher at The TIE.