Terra Luna Collapse, Regulations And A 2021 Subpoena By The SEC

Regulations in decentralized networks don’t apply. 

There is only code, the network, miners, and the users. Perhaps the exchanges too, since they run nodes and have to upgrade according to consensus rules.
There is no leader and no CEO to blame. Regulators have no control over decentralized blockchains.

Yet, it is different when centralized networks or tokens offer unregistered securities as tokens (with ICOs). 

When a single person or team controls the centralized token offered for public sales, then regulations, of course, apply. 

The challenge scammers meet in this market is to create an illusion that all cryptocurrencies contain the same features, yet instead, they sell unregistered securities or offer high-risk investments with unjustifiably high returns.

Such is the case of Do Kwon and the Terra Luna Ponzi, where we encountered influencers massively supporting a high-risk platform.

The Subpoena Do Kwan Was Served in 2021 (At The Beginning of The Scam)

Usually, financial regulators do not prevent financial crime but allow them to grow to a sizeable height first. Take, for example, the Bernie Madoff Ponzi Scheme that kept running uninterrupted for decades and reached a size of $65 billion.

Although Terra Luna was an exception since the founder of Terra Luna, Do Kwan, was served with a subpoena by the SEC as early as 2021.

An event that the popular crypto media downplayed and accused the SEC of overreacting:

Speculation around the recipient of the subpoena brought additional attention to the event as attendees wondered what else the SEC had in store.

Mainnet (conference) attendees joked about whether the SEC had booked a room at the Marriott Marquis Hotel, and Messari CEO Ryan Selkis told Decrypt in a video interview.

“We have invited congressional staffers and regulators to this event, we would have comped many of their passes, and they choose to hide by the escalators instead of learning about what’s actually going on in the industry.”

Definitely Decrypt with this approach simply created the usual positive sentiment for an asset it was in favor of, but the supposed journalist that wrote this did not even wonder why Do Kwon was served with a subpoena.

Someone gets served a subpoena, and journalists did not question why.

And in the end, Do Kwan turns out to be responsible for the crypto market collapse, with $40 Billion worth of assets evaporating and various accusations against him concerning billions of dollars withdrawn from exchanges to bank accounts.

Yet, Daniel Roberts, Scott Chipolina, and Jeff Benson as journalists DID NOT CARE to investigate why this guy got served and why is the US justice system asking him to testify in a court.

The hypocrisy in this market and the biased reporting of news is profound and outrageous.

Decrypt is yet another crypto website that can’t be considered credible, but presents a biased opinion of what Bitcoin is and promotes certain cryptocurrencies according to the guidelines presented by the BTC maxis that operate it.

What we call today an “industry” is overrun by professional Ponzi promoters that suddenly became all-powerful and popular.

Sadly, many investors will follow them into their financial destruction

Developers and operators of centralized networks are liable for any regulations or fines. Next time, if you want to avoid the SEC and the rest financial regulators, make it decentralized and release control of your project to the public.

Devs made their networks centralized and allocated vast token resources to themselves, expecting quick riches but also evading regulations with vast PR campaigns, strengthening their alibies.

Conclusion

Regulations are invalid in decentralized cryptocurrencies since regulators can’t enforce anything. But this is not the same with centralized entities.

Some are centralized like Tether, Chainlink, Solana, Cardano, and of course Terra Luna, and even maintain a parent company managing their business plan and marketing. These are blockchain private corporations and not decentralized cryptocurrencies.

The same is XRP, BNB, BSV, and many more. XRP for those that still think it is decentralized, its viability depends on the SEC’s expected decision.

In a sense, investors are tricked into investing in shady networks, and the crypto market has today limited reaction mechanisms.

All this could have been avoided, if investors determined there are secure and reliable networks that work flawlessly for years instead of investing in anything simply because it is new.

• Cover Photo by " 12019 " on Pixabay

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