💥 How LUNA's $4.5 Billion Fine Ended the Biggest Crypto Scandal 💥
🔍 In a landmark case brought by the U.S. Securities and Exchange Commission (SEC), the U.S. District Court for the Southern District of New York has issued a final judgment against Terraform Labs and its co-founder Do Kwon. This case has concluded with fines totaling $4.5 billion for multiple securities violations.
💸 The penalties include $3.6 billion in fines and disgorgement, $467 million in withholding interest, and $420 million in civil penalties. Kwon is personally liable for $110 million in fines and disgorgement, plus $14.3 million in interest. Additionally, Kwon must pay $204.3 million in relief, which includes $110 million in disgorgement, $14.3 million in prejudgment interest, and $80 million in civil penalties.
📉 To settle these fines, Kwon must transfer various assets, including ownership interests in PYTH tokens, to the Terraform bankruptcy estate. These assets will be used to pay fines and will be distributed to affected investors through a liquidation trust. The court has authorized the SEC to use all collection processes to enforce the judgment, including civil contempt if Kwon fails to comply within 30 days.
🚫 Furthermore, the court has imposed permanent restrictions on Terraform Labs and Kwon. They are prohibited from trading unregistered securities, dealing in crypto asset securities, or encouraging others to do so. Kwon is also permanently barred from serving as an officer or director of any company with registered securities or reporting obligations.
⚖️ Terraform Labs must handle its bankruptcy case under these new restrictions. With court approval, the company can liquidate its crypto assets, destroy wallet keys, and burn tokens as required. Trading activities on their platform are banned, and third parties cannot withdraw or close positions.
