Terraform settles with SEC for 45 billion fine Do Kwon to pay 200 million individually
The U.S. Securities and Exchange Commission (SEC) submitted a “Final Consent Judgment Proposal” on Wednesday, requesting that Judge Jed Rakoff of the Southern District of New York approve the plan. According to the proposal, Terraform will pay $3.58 billion in illegal proceeds, $420 million in civil penalties, and Do Kwon will be prohibited from becoming an executive or director of any public company.
Terraform’s negotiation failed, ultimately reaching a settlement
SEC: Deterrence for wrongdoers
Despite Terraform and Do Kwon’s lawyers continuously requesting a significant reduction in the total fines, they ultimately agreed to a fine of up to $4.47 billion, including disgorgement of proceeds, prejudgment interest, and civil penalties. The settlement agreement still awaits approval from Judge Jed Rakoff, who is responsible for this case.
Do Kwon must personally pay at least $204,320,196 to be distributed to the harmed investors, although it is unclear what the criteria for harmed investors are.
Additionally, Terraform and Do Kwon will be permanently banned from trading any cryptocurrency securities.
SEC: Deterrence for wrongdoers
According to CoinDesk, the SEC stated in court documents:
If approved, the proposed judgment will not only send a clear deterrent message to wrongdoers but also send a clear message to those trying to evade federal securities laws by setting new standards for cryptocurrency assets. The multi-billion dollar judgment against the defendants provides meaningful and swift compensation to the harmed investors.
The trial between Terraform and Do Kwon took unexpected turns, including Do Kwon’s initial escape, extradition between the U.S. and South Korea, and ultimately the success of the U.S. SEC.
A spokesperson for Terraform Labs declined to comment. The company had previously stated that it is currently in a state of bankruptcy, with only about $1.5 billion in assets remaining. How will Terraform repay the excessive fines?
Do Kwon
SEC
Terraform
Further reading
Mark Cuban calls cryptocurrency a key issue in the U.S. election: Biden may lose due to the SEC
Gary Gensler: Ethereum ETF listing will take time, severe lack of disclosure in the cryptocurrency industry.
