SEC seeks $5.3 billion from Terraform Labs and Do Kwon
The US Securities and Exchange Commission (SEC) seeks a $5.3 billion judgement against Terraform Labs and co-founder & CEO Do Kwon.
Terraform Labs filed a motion for settlement at $3.5 million; dO Kwon offered $800,000.
The US Securities and Exchange Commission (SEC) is after a $5.3 billion judgement against Terraform Labs and its co-founder and CEO Do Kwon.
SEC recently filed a motion in the US District Court for the Southern District of New York, outlining the disgorgement and civil penalties it wants imposed against Terraform Labs and Kwon.
The $5.3 billion amount includes $4.7 billion in disgorgement and prejudgment interest following the recent fraud verdict against the crypto company.
Terraform Labs offers $3.5 million, Do Kwon $800,000
SEC also seeks $520 million in civil penalties, of which the SEC wants $420 million imposed against Terraform Labs and $100 million against Kwon. The securities watchdog has also filed for injunctions against Kwon, seeking a ban against him taking any executive roles in the market.
The regulator also wants Kwon to comply with full financial disclosures requirements.
SEC’s filing and suggested charges contrast massively to that of the Terraform Labs and Kwon. In their brief, the company and the detained Kwon proposed civil remedies of $3.5 million, while Kwon offered just $800,000.
The proposed penalties and civil remedies await judicial approval, with this the next step after the jury’s verdict on April 5, 2024. The verdict was that Do Kwon and his company was liable for defrauding investors, particularly offering misleading statements about the stablecoin TerraUSD (UST), crypto token Luna (LUNA) and wLUNA.
LUNA and UST’s collapse in 2022 saw a massive contagion across crypto. Do Kwon went on the run before being arrested in Montenegro in May 2023. He remains in custody amid potential extradition – Kwon is wanted by both the US and South Korea.
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