Federal prosecutors in Manhattan charged Kwon with two counts each of securities fraud, wire fraud, commodities fraud and conspiracy, stating that he misled investors in 2021.
The indictment included allegations that Kwon’s claims about TerraUSD’s stability were false, leading both retail and institutional investors to believe in Terraform's products.
Prosecutors emphasized that much of Terra’s growth was fueled by Kwon's deception, as he manipulated perceptions about the viability of the Terra Protocol.
When the value of TerraUSD began to decline in 2022, warnings from the supporting trading firm indicated that maintaining its price was becoming increasingly difficult.
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