U.S. SEC Whistleblower: Chai payment app aims to promote the Terra ecosystem and does not use cryptocurrency

ChainCatcher news, according to The Block, in a new summary judgment by Judge Jed Rakoff of the U.S. District Court for the Southern District of New York, he ruled that Do Kwon and his co-founded company Terraform Labs sold four cryptocurrencies that were deemed unregistered securities: TerraUSD (UST), LUNA, wLUNA, and Mirror Protocol (MIR).

Jed Rakoff also elaborated on the evidence provided by the SEC, pointing out that the Chai payment platform, which Do Kwon often used as a real-world use case for the Terra blockchain for promotion, actually never operated on the Terra blockchain from the beginning. Instead, payments were allegedly settled through traditional methods and then "mirrored" on the Terra blockchain by servers controlled by Do Kwon.

It is reported that the documents also include a statement from an SEC whistleblower, the Chief Product Officer of Chai, who was informed by a former Terraform employee who had joined Chai that "there were no cryptocurrency operations happening internally at Chai." The whistleblower also claimed to have questioned Do Kwon in September 2021, at which time Do Kwon did not deny the allegations but stated that he did not care about Chai at all.