SEC is investigating the firm behind LUNA and TerraUSD
The Securities and Exchange Commission is looking into whether Terraform Labs, which created LUNA and TerraUSD, broke US law.
The US Securities and Exchange Commission (SEC) is investigating whether Singapore-based Terraform Labs, the company behind failed cryptocurrencies LUNA and TerraUSD broke any US laws regarding the marketing of the tokens.
Terraform Labs has since replaced the original LUNA coin with a new token as the coin's value dropped to near zero. It has discontinued its backing of the TerraUSD coin.
First reported by Bloomberg, members of the SEC's Division of Enforcement are looking into whether Terraform Labs broke investor protection laws during the pre-crash marketing of the LUNA and TerraUSD coins.
The SEC has stepped up its high-profile investigations into the crypto world, with a probe in Binance's BNB token reported earlier this week. Additionally, the US saw its first case of insider trading in the NFT (non-fungible token) world, when the US Attorney's Office for Manhattan charged an ex-OpenSea product manager with the violation earlier this month.
Recently, a bipartisan bill co-authored by US senators from both the Democrat and Republican parties sought to place the regulatory responsibility for cryptocurrencies in the hands of the Commodities Futures Trade Commission (CFTC) instead of the SEC. The former is expected to be a more lenient taskmaster.
The bill is not expected to be voted upon until after the mid-term elections later this year. It has a strong stance on proof of assets to be held by stablecoin issuers, presumably in response to the TerraUSD collapse earlier this year.
Edited by Affirunisa Kankudti
