"Kwon Do-hyung and Others Caught in US SEC Investigation into Cryptocurrency Crimes"

SEC Continues Investigations into Tron, Coinbase, etc.
Likely to Punish by Recognizing Cryptocurrency as 'Securities'

Cryptocurrency crimes involving Do Kwon, CEO of Terraform Labs behind the Terra and Luna incidents, major exchanges, and famous Hollywood celebrities are being uncovered one after another through the U.S. Securities and Exchange Commission (SEC)'s 'dragnet' investigation.

On the 24th (local time), Bloomberg reported on the cryptocurrency crime investigations conducted by the SEC, triggered by the recent arrest of CEO Kwon. The SEC filed a lawsuit in the New York Federal Court the day before against Justin Sun, founder of the cryptocurrency 'Tron,' and the Tron Foundation for violations of securities laws. It was revealed that Sun paid bribes to eight famous celebrities to promote Tron. Among them were Lindsay Lohan, the lead actress of the movie Mean Girls, rapper Soulja Boy, and influencer Jake Paul. Six of them, including Lohan, immediately agreed to pay a total of $400,000 to the SEC in disgorgement and fines.

Last month, the SEC also filed a lawsuit against CEO Kwon and Terraform Labs for fraud amounting to at least $40 billion (approximately 52 trillion KRW). This marks the first judicial action taken by any of the multiple national agencies involved in related investigations, including the Korean prosecution, the U.S. Department of Justice, and Singapore police.

Since last year, the SEC has been examining illegal activities by Coinbase, the largest cryptocurrency exchange in the U.S. They are suspected of allowing investors to trade unregistered securities. The SEC is also investigating whether the 'staking service,' which uses investors' cryptocurrencies for blockchain operations and pays rewards to investors, violates laws.

In the process of investigating Terraform Labs and Coinbase, the SEC classified cryptocurrencies as 'securities.' Unlike cryptocurrencies that are outside the scope of financial regulators, securities can be regulated and punished under existing laws.

Bloomberg evaluated, "At the core of the recent SEC decisions is the determination to register various crypto assets with institutions and treat them as securities subject to regulation," adding, "The SEC is testing its authority."