The U.S. Securities and Exchange Commission (SEC) sued Terraform Labs and its co-founder Do Kwon on Thursday, Bloomberg reported. The SEC charged Terraform and Do Kwon with defrauding investors and selling unregistered securities and securities swaps. The SEC said Terraform and Do Kwon repeatedly misled and deceived investors by claiming that a well-known South Korean mobile payment app used the Terra blockchain to settle transactions, increasing the value of LUNA. At the same time, they are also suspected of misleading investors about the stability of UST. The SEC has filed a civil lawsuit in the U.S. District Court for the Southern District of New York. Gurbir Grewal, director of enforcement at the SEC, said the project is “neither decentralized nor financial.” It’s just a scam backed by so-called algorithmic “stablecoins.” The price of the stablecoin is controlled by the defendants, not any code.