The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Terraform Labs and its founder Do Kwon for “orchestrating a multi-billion dollar crypto asset securities fraud.”

In a Feb. 16 statement, the SEC said Kwon and Terraform offered and sold an “inter-connected suite of crypto asset securities, many in unregistered transactions” pointing to its algorithmic stablecoin, TerraClassicUSD (USTC) and its connected cryptocurrency Terra Luna Classic (LUNC).

In a statement, SEC Chair, Gary Gensler, said:

“We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for LUNA and Terra USD. We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.”

The SEC filed a complaint in the U.S. District Court for the Southern District of New York with charges relating to violations of the registration and anti-fraud provisions of the Securities Act and the Exchange Act.

“I commend the SEC’s hard-working staff who remained vigilant in such an important investigation, even when the defendants attempted to prevent us from obtaining important information about their business,” said Gensler.

“This case demonstrates the lengths to which some crypto firms will go to avoid complying with the securities laws, but it also demonstrates the strength and commitment of the SEC’s dedicated public servants,” he added

This is a developing story, and further information will be added as it becomes available.