The U.S. Securities and Exchange Commission is cracking down on Terraform Labs and its founder Do Kwon.

In a Feb. 16 announcement the SEC said it was charging Do Kwon and Terraform Labs with “orchestrating a multi-billion dollar crypto asset securities fraud” related to its algorithmic stablecoin and other cryptocurrencies.

In a lawsuit filed in the U.S. District Court for the Southern District of New York, the regulator has accused the firm and its founder of violating the anti-fraud provisions of the Securities Act and the Exchange Act.

The SEC categorizes the entire Terra ecosystem as one that was “neither decentralized, nor finance.” Instead, it was simply fraud propped up by its algorithmic stablecoin UST, said Gurbir S. Grewal, Director of the SEC’s enforcement division. He argued that the price of UST was controlled by the defendants and not any code.

The lawsuit alleges that Terraform Labs and Kwon marketed these assets to the public in order to earn a profit, naming the 20% interest offered for the UST stablecoin through the Anchor Protocol. The complaint states that investors were misled about the stability of UST, because of intentional deception by Kwon and Terraform Labs. 

“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,” said SEC Chair Gary Gensler in a statement.

“We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors,” he added.

Kwon, who is wanted by South Korean authorities for violating the country’s capital markets act, is believed to be in Serbia by local prosecutors, according to a report from Yonhap News. Interpol has also issued a red notice for his arrest and his passport has been nullified. South Korea’s Ministry of Justice has requested assistance from the Serbian government to locate the Terra founder.