WEB3
by BSCN
June 13, 2024
The settlement follows a two-week trial and a jury’s verdict holding Terraform Labs and its founder, Do Kwon, responsible for the 2022 crash.
Terraform Labs has agreed to a $4.47 billion settlement with the U.S. Securities and Exchange Commission (SEC), according to June 12 Court Filings. This settlement stems from the collapse of TerraLuna (LUNC) and TerraUSD (UST).
Kwon is personally responsible for at least $204,320,196 of the $4,473,828,306 that must be paid. This penalty is slightly lower than the SEC’s initial demand but significantly higher than Terraform Labs’ counteroffer.
The penalty surpasses the $4 billion fine levied on Binance by the U.S. Justice Department.
The proposed penalty, disclosed after a two-week trial in March, follows a jury's determination that both Terraform Labs and its founder, Do Kwon, were legally responsible for the company's crash in 2022. This settlement, if approved by a New York judge, could become one of the largest between a crypto entity and a U.S. regulator. Upon approval, this settlement could end the long ongoing saga of Terra's collapse
Terraform Labs' current CEO, Chris Amani, and Kwon agreed to the settlement terms on June 6.
The SEC initially sought $5.3 billion in fines, while federal prosecutors argued for $4.7 billion in disgorgement, accompanied by $520 million in civil penalties from the firm and Kwon. Terraform Labs agreed in principle to settle, and filings were due by June 12.
The decision to settle followed a jury’s verdict in April, where Do Kwon and his company were found liable for deceiving investors about their cryptocurrency products.
Terraform Labs' collapse led to its liquidation, wiping out over $40 billion from the market, and attracting regulatory attention in 2022. After that, Terraform Labs' co-founder Do Kwon was charged with fraud by the authorities.
Do Kwon is awaiting extradition in the Balkans. He was released on home arrest from Spuž prison in Montenegro after serving a sentence for travel paper fraud.
His extradition to either the U.S. or South Korea has been delayed due to legal back-and-forth. Kwon was not present for the trial in New York, as he remains in custody in Montenegro.
Disclaimer
Disclaimer: The views expressed in this article do not necessarily represent the views of BSCNews. The information provided in this article is for educational and informational purposes only and should not be construed as investment advice. BSCNews assumes no responsibility for any investment decisions made based on the information provided in this article
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