Federal regulator
Appears in 2 stories
The SEC treated TerraUSD and related tokens as securities and took Terraform and Kwon to trial. - Won a civil fraud verdict and multibillion-dollar judgment against Terraform and Kwon.
Do Kwon sold TerraUSD as math-made money that could never break. In 2022 it snapped, vaporizing more than $40 billion and triggering a global hunt for the Stanford‑trained founder. Three years, an Interpol red notice, and a Montenegro arrest later, a New York judge has now handed him 15 years in federal prison.
Updated Dec 11, 2025
The SEC is the main U.S. federal regulator for securities markets, including ETFs and other registered investment companies. It writes and enforces rules such as Rule 18f‑4, reviews ETF registration statements, and has the authority to block or condition new fund launches. - Primary regulator setting and enforcing ETF leverage limits
In late 2025, staff at the U.S. Securities and Exchange Commission sent nearly identical warning letters to nine ETF issuers, including Direxion and ProShares, effectively freezing a wave of applications for 3x–5x leveraged ETFs tied to single stocks, sectors, and crypto assets such as Bitcoin and Ethereum. Citing Rule 18f‑4’s value‑at‑risk cap and insisting that the true, unleveraged underlying asset must be used as the “designated reference portfolio,” the staff signaled that new ETFs cannot legally target more than 200% exposure. The letters forced issuers either to withdraw or redesign products that sought ultra‑high leverage just as crypto markets reeled from an October–November crash and heavily leveraged products posted outsized losses.
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