While still facing criminal fraud charges in both the U.S. and South Korea, Kwon argues that his enterprise's digital assets were not targeted specifically at U.S. persons and that the SEC has no authority over these digital assets, further stating that Terraform did not conduct any public offerings warranting SEC registration.
The Terra network, originally a promising cryptocurrency ecosystem that peaked at $60 billion, experienced a dramatic crash after its algorithmic stablecoin terraUSD lost its $1 peg and dropped to 35 cents and its companion token, LUNA, fell to a few cents in May 2022. Despite efforts to stabilize the network by Kwon and the Luna Foundation Guard, the platform faced a significant loss of capital, damaging investor trust and ultimately leading to the launch of a new blockchain,"Terra 2.0," without a stablecoin, and the renaming of the old Terra blockchain tokens to luna classic .