The U.S. Securities and Exchange Commission (SEC) is suing Terraform Labs, the company behind the failed TerraUSD stablecoin, and its co-founder Do Kwon, according to a Bloomberg report, citing people familiar with the matter.
The SEC is looking into whether Terraform misled investors about its ability to maintain a one-to-one peg to the U.S. dollar, and the lawsuit will argue that TerraUSD should have been registered with the agency. The collapse of TerraUSD last year led to wave of bankruptcies in the crypto industry.
Terraform Labs told Bloomberg it has not been contacted by the SEC about the action, while SEC declined to comment to Bloomberg.
This is a developing story and will be updated.
