Terraform Labs to Close Post $4.5B SEC Settlement
3 min read
Terraform Labs to Close Post $4.5B SEC Settlement
Terraform Labs has come to an agreement with the United States Securities and Exchange Commission (SEC) to pay around $4.47 billion as part of a settlement. This settlement follows a jury’s decision that held Terraform Labs and its co-founder accountable for the downfall of the Terra ecosystem, which led to a staggering $40 billion loss in investor assets. Chris Amani, the CEO of Terraform Labs, mentioned that the company will halt operations post-settlement. The firm plans to offload significant projects within the Terra ecosystem and hand over control of the Terra blockchain to the community.
In another legal development, Ripple’s legal team has approached a court to suggest an “appropriate” civil penalty in its litigation with the SEC. This came after the settlement between the SEC and Terraform Labs. The SEC has demanded approximately $2 billion from Ripple in terms of disgorgement, prejudgment interest, and civil penalties. Ripple countered, arguing for a penalty no higher than $10 million, but the SEC contested Ripple’s proposal.
Ripple’s contention was that Terraform’s $420 million penalty was just about 1.27% of its “gross sales” of $33 billion. The SEC dismissed this comparison, stating it was not a fair equivalent. The regulator calculated Terraform’s penalty based on “the gross profit of the violative conduct,” which amounted to over $3.5 billion, translating to nearly a 12% ratio. If this same ratio were applied to Ripple’s $876.3 million in gross profits, the SEC asserted, the penalty for Ripple would come to $102.6 million. According to the SEC, a lower penalty would not fulfill the objectives of the civil penalty statutes.
President Joe Biden has announced new leadership picks for key financial regulatory bodies in the United States. This reshuffling includes the Securities and Exchange Commission (SEC), the Federal Deposit Insurance Corporation (FDIC), the Treasury Department, and the Financial Stability Oversight Council. President Biden plans to nominate Christy Goldsmith Romero of the Commodity Futures Trading Commission (CFTC) to succeed Martin Gruenberg as the Chair of the FDIC. He intends for CFTC Commissioner Kristin Johnson to take on the role of Assistant Secretary for Financial Institutions at the Treasury Department, while Caroline Crenshaw is slated to continue as a commissioner at the SEC.
Switching gears to international news, Turkey is set to impose a 0.03% transaction tax on cryptocurrency trading. This comes after earlier denials from the Turkish government that it planned to tax crypto and stock gains. The new tax is part of a broader fiscal reform aimed at addressing Turkey’s budget shortfall, exacerbated by the devastating earthquakes of 2023. The 0.03% transaction tax on crypto aims to regulate financial transactions more comprehensively and cater to the growing popularity of crypto trading among Turkish investors looking to protect their assets against inflation and currency devaluation.
In Australia, the country’s largest stock exchange, the Australian Securities Exchange (ASX), has approved its first spot Bitcoin exchange-traded fund (ETF). The ETF, named the VanEck Bitcoin ETF (VBTC), will start trading on June 20, offered by investment firm VanEck. Although this marks the first spot Bitcoin ETF sanctioned by ASX, Australia has already seen the launch of two other Bitcoin ETFs over the past two years. Recently, the Monochrome Bitcoin ETF (IBTC) was greenlit and began trading on Cboe Australia, the nation’s second-largest stock exchange.
Chris Amani seems to be handling this situation with grace. Wishing Terraform Labs and its projects all the best moving forward!
Loving the proactive measures from Chris Amani and team. Onward to new beginnings for the Terra community!
Wow, $4.47 billion is a hefty sum. Glad to see a resolution here.
Ripple’s argument on the penalty seems valid. Hoping for a balanced judgement!
Offloading projects and handing over control to the community feels like passing the buck. Take responsibility, Terraform Labs!
Great leadership in crisis from Terraform Labs. Best of luck with the transition to community control of the Terra blockchain! 🌐🌱
The Turkish crypto tax feels like a step towards better financial regulation. Heres hoping it works out for everyone involved!
President Biden’s reshuffling of financial regulatory bodies is desperately needed after this mess. Reform can’t come soon enough! 🏛️🔄
The new ETF in Australia is an exciting option for crypto investors. Go VanEck Bitcoin ETF!
President Biden’s new picks for the FDIC, SEC, and other institutions look promising. Positive changes ahead!
This settlement won’t restore investor trust in the crypto market. Another black eye for the industry.
VanEck Bitcoin ETF sounds promising. Can’t wait to see its performance on ASX! 📊🚀
New leaders at financial regulatory bodies could mean positive changes ahead. Exciting appointments!
Ripple’s penalty won’t make up for Terraform Labs’ failures. Investors deserve more protection and accountability. 😒👎
Nice to see the SEC holding firms accountable, yet still leaving room for negotiation.
Secure and fair financial systems are crucial. Kudos to President Biden for the new nominations. 🇺🇸👔
Incredible to see how proactive Ripple is being in their litigation strategy. Fingers crossed for a fair outcome!
Thinking about the impact of those earthquakes, its clear Turkey needs financial reforms. The 0.03% tax seems reasonable.
The Terraform Labs debacle is a stark reminder that the SEC needs stronger regulation and enforcement.
Heres to a fair and balanced outcome in Ripples litigation.
Stopping operations post-settlement seems like a cowardly move by Terraform Labs. What about accountability and making amends?
New leadership at the SEC, FDIC, and other key institutions change is in the air!
Big news! Congratulations to Terraform Labs for reaching a settlement with the SEC. Here’s to the future of the Terra community! 🚀🔥
Australia’s move to approve more Bitcoin ETFs shows the country’s forward-thinking approach. Yay ASX! 🎉🇦🇺
What a joke! A $4.47 billion settlement is a mere fraction of the massive $40 billion wiped out. Investors deserve better!
This whole affair shows the crypto market is still the Wild West. The losers here are everyday investors.
Chris Amani’s statement is just lip service. Halting operations won’t bring back the billions lost by investors. 👎😠
How can anyone trust the Terra blockchain handed over to the community after such a massive failure?
Exciting to see Australia continue to embrace Bitcoin with another ETF! Go ASX!
Turkey’s 0.03% crypto transaction tax is a thoughtful approach to their budget shortfall issues. 🇹🇷💼📉
Honestly, $4.47 billion is a slap on the wrist for Terraform Labs compared to the $40 billion investor loss. They got off easy!
This settlement feels like too little, too late. The damage done to investors is irreversible. Where’s the justice?!
The SEC needs to step up its game. This settlement is way too lenient given the magnitude of the losses.
Terraform Labs’ commitment to offloading significant projects shows their dedication to the Terra ecosystem. Community-driven blockchain – love it! 🤝🔗
The SEC’s inconsistency is baffling. $4.47 billion for Terraform, but another case could be much less or more with no clear rationale.
I don’t see how halting operations and offloading projects helps anyone. It sounds like trying to escape the mess they created.
Australia’s crypto landscape is growing rapidly with another Bitcoin ETF launching. Kudos to ASX!
Big props to Chris Amani for navigating this tough situation. Onwards and upwards!
Turkey’s new transaction tax on crypto is a smart move to regulate the market. 🇹🇷💰