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Terraform Labs to pay $4.5B Penalty in SEC Settlement
Do Kwon is personally on the hook for $200 million.
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The SEC has asked the court to approve a final consent judgment in its case against Terraform Labs and its former CEO Do Kwon.
What's the scoop?
- Settlement Amount: Terraform Labs agreed to pay nearly $4.5B, including $3.5B in disgorgement (giving up funds gained illegally), over $460M in prejudgment interest, and $ 420M as a civil penalty.
- Kwon’s Part: Do Kwon will personally pay $200M to the Terraform bankruptcy estate and will be banned from serving as an officer or director of a public company.
- Company’s Status: Terraform filed for bankruptcy earlier this year before its trial against the SEC.
Bankless Take:
$4.5B marks a drawdown from the SEC’s initially proposed $5.3B, while still standing incredibly far above Kwon’s counterproposal of $1M in fines. Leading up to this decision, the SEC had hunted Kwon for over a year for “intentionally and recklessly orchestrating one of the largest securities frauds in U.S. history.” The SEC has not been the only government agency to seek criminal charges against the former Terra CEO, with South Korea also looking to prosecute. Overall, this marks a historic end to one of crypto’s largest collapses. Now, the question is, where will Terraform Labs get all that cash?