This includes a $4.5 billion payment in disgorgement, prejudgment interest, and civil penalties.

This settlement agreement, submitted on Wednesday, is pending approval by the New York judge overseeing the case.

Settlement Includes $4.5 Billion Fine and Permanent Trading Ban

The agreement permanently bans Terraform Labs and Do Kwon from trading crypto asset securities. This ban encompasses all tokens within the Terra ecosystem. This ban is a major regulatory measure to limit the activities of the crypto firm and its former CEO.

The financial breakdown of the settlement includes a requirement for Do Kwon to pay at least $204,320,196 personally. The total amount of $4,473,828,306 was established to address the SEC’s allegations against Terraform Labs.

Source: X

This settlement amount is slightly lower than the SEC’s initial demand of $5.3 billion but significantly higher than the $1 million civil penalty suggested by Terraform Labs in their April memorandum opposing the SEC’s motion for final judgment. Terraform Labs’ proposal did not include any disgorgement or injunctions, highlighting the substantial gap between the SEC’s enforcement stance and the company’s suggested penalties.

More About The SEC & Terra Labs

The SEC’s charges against Terraform Labs and Kwon were rooted in allegations of fraud and the misleading of investors regarding the stability of the TerraUSD (UST) stablecoin, which collapsed dramatically in May 2022. The implosion of UST led to massive financial losses for investors and triggered broader instability in the cryptocurrency markets.

Source: X

For Terraform Labs and Do Kwon, this settlement marks a significant and costly resolution to their legal battles with U.S. regulators. It also underscores the growing scrutiny and regulatory pressure faced by crypto firms operating in the United States. The case highlights the SEC’s commitment to holding crypto companies accountable and serves as a warning to others in the industry about the consequences of regulatory violations.


The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.


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