CryptoForDay

Your daily dose of crypto news

SEC Seeks $5.3B Judgment Against Terraform Labs and Do Kwon

2 min read
e5f30e519ea3920639a856798e1a0388 CryptoForDay

SEC Seeks $5.3B Judgment Against Terraform Labs and Do Kwon

The Securities and Exchange Commission (SEC) in the United States has filed a motion demanding billions of dollars in disgorgement and civil penalties against Terraform Labs and its co-founder, Do Kwon, after a verdict was reached in a civil case. According to an April 19 filing in the U.S. District Court for the Southern District of New York, the SEC is seeking approximately $4.7 billion in disgorgement and prejudgment interest from Kwon and Terraform following the civil case ruling. Alongside this, they are also looking for a total of $520 million in civil penalties, with $420 million coming from Terraform and $100 million from Kwon. Both parties have submitted their briefs for potential remedies in the case, with Terraform suggesting a maximum civil penalty of $3.5 million and Kwon proposing only $800,000. In addition to the monetary judgment, the SEC has suggested prohibiting Kwon from serving as an officer or director of a securities issuer and requesting full disclosure of his accounts and assets. Terraform could also face a “conduct-based injunction” to prevent them from engaging in similar fraudulent behavior in the future. These proposed remedies and civil judgment still require approval from a judge. The SEC argues that the defendants have shown no remorse for their actions and are likely to commit further violations in the future. They believe that the court should send a strong message that such misconduct and attempts to create new standards for behavior in the crypto markets, contrary to federal securities laws, will not be tolerated. On April 5, a jury found Terraform and Kwon guilty of defrauding investors through misleading statements about the offer and sale of TerraUSD (UST), Luna ( LUNA ), and wLUNA. Terraform has not yet responded to the April 19 filing. The SEC trial proceeded in Kwon’s absence, as he is currently involved in legal proceedings in Montenegro. Kwon was arrested in March 2023 for using falsified travel documents while attempting to leave the country. He was later released but the question of his extradition to either the U.S. or South Korea remains unanswered. He may face criminal charges in both countries.

6 thoughts on “SEC Seeks $5.3B Judgment Against Terraform Labs and Do Kwon

  1. Kwon and Terraform should have thought about the consequences before engaging in fraud.

  2. Let’s hope the judge approves these remedies and civil judgment swiftly.

  3. It’s outrageous that Kwon is suggesting a mere $800,000 penalty! Who does he think he’s fooling? These crooks need to be taught a lesson they’ll never forget!

  4. Good on the SEC for requesting full disclosure of Kwon’s accounts and assets. 🔍💰

  5. billion in disgorgement? Seriously? That’s pocket change for these fraudsters! They should be held accountable for every single cent they stole from investors!

  6. The SEC is taking a strong stance against fraudsters in the crypto sphere. 🛡️🚫

Leave a Reply

Copyright © All rights reserved.