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🌖 Do Kwon, Terraform Labs Face $5B Penalty After LUNA Fiasco
The United States Securities and Exchange Commission (SEC) has moved to request billions of dollars in disgorgement and civil penalties from Do Kwon and Terraform Labs, the team behind the ill-fated Terra Luna and UST tokens.
In a recent filing in the U.S. District Court for the Southern District of New York, the SEC sought approximately $4.7 billion in disgorgement and prejudgment interest from #TerraformLabs and its co-founder, Do Kwon.
Alongside the $4.7 billion for disgorgement and prejudgment, the U.S. regulator requested a total of $520 million in civil penalties. In particular, Terraform Labs is asked to pay $420 million, while Kwon faces a $100 million penalty. Cumulatively, the U.S. regulator is requesting over $5 billion in penalties from #DoKwon and Terraform Labs.
Notably, on April 5, a jury found Terraform and Kwon guilty of defrauding investors concerning statements regarding the offer and sale of TerraUSD (UST), Luna ($LUNA ), and wLUNA. Meanwhile, Terraform suggested a maximum civil penalty of $5.28 million in its filing, while Kwon proposed approximately $828,000.
On the other hand, in addition to the monetary judgment, the SEC has suggested barring Kwon from holding positions as an officer or director and mandating full disclosure of his accounts and assets.
If approved, Terraform could face a “conduct-based injunction” to prevent the recurrence of the behaviors that led to the extensive fraud. However, these proposed remedies and the civil judgment await the ruling of a judge.
Furthermore, the SEC argued that #Terraform and #kwon have shown no remorse for their actions, raising significant concerns about the potential for further violations, which the regulator claims may already be in progress. The filing urges the court to send a clear message that such audacious misconduct will not be tolerated.
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