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In a $4.47 billion deal with the SEC, Terraform will end a legal battle
Do Kwon, co-founder of Terraform, and the company have settled with the SEC for $4.47 billion.
A $3.58 billion discharge fee and a $420 million civil penalty are part of the settlement.
Following an 11% decline over the last week, LUNC is up 2%.
On Wednesday, Terraform Labs and the Securities and Exchange Commission (SEC) settled their civil fraud case for $4.47 billion.
Terraform Labs and its co-founder, Do Kwon, have settled a case filed by the SEC alleging that they violated securities laws. The business was responsible for the LUNA and TerraUSD projects, both of which were unsuccessful. The SEC's filing earlier today with the US District Court of New York is the basis for the story.
To learn more about how Do Kwon and Terraform Labs were implicated in deceiving investors before to the UST stablecoin crash, read here.
In all, the corporation will have to fork out $4.47 billion to resolve the case, with $3.5 billion going toward disgorgement and $466 million for pre-judgment interest. Additionally, Do Kwon was assessed a settlement cost of $204 million.
Kwon and Terraform Labs would also be barred from purchasing or selling cryptocurrency assets, including Terra ecosystem tokens, as part of the settlement agreement.
Accusations of violating securities laws via unregistered sales of stocks were leveled against Terraform and Do Kwon by the SEC in February 2023. Additionally, they were said to have utilized their stablecoin to deceive investors.
Following a year of litigation, the parties reached a settlement agreement in May and will now wait for the district court to approve the settlement before making any more payments.
As of this writing, Terra Luna Classic (LUNC) has risen 3.73 percent since the settlement. This may be because the community is demanding a new burn tax distribution plan, which has just been proposed. After falling 11% last week, the token is now making a comeback.
