According to The Block, the U.S. Securities and Exchange Commission (SEC) submitted a proposed final consent judgment on Wednesday, requesting approval from Judge Jed Rakoff of the U.S. District Court for the Southern District of New York.
According to the proposed ruling, Terraform Labs has agreed to settle with the SEC and will pay a penalty of $4.47 billion, including $3.58 billion in illegal proceeds and $420 million in civil penalties. In addition, founder Do Kwon will also be prohibited from serving as an executive or director of any listed company. The SEC said Do Kwon will also have to pay approximately $204 million to the Terraform Labs bankruptcy estate for distribution to harmed investors.
The SEC said in a court filing:
"The proposed consent judgment not only addresses this significant fraud by imposing significant remedies, penalties and deterrents, including multi-billion dollar judgments against the defendants, but also provides relief to those who collectively lost money when the defendants' scheme collapsed. Billions of dollars of investors provided meaningful and prompt compensation."
The U.S. Securities and Exchange Commission charged Terraform and Kwon in February 2023 over the collapse of the algorithmic stablecoin Terra USD (UST) a year ago. The SEC said the company maliciously deceived and misled investors. Just a few months ago, the two sides were arguing over the size of the fine. Lawyers for Terraform and Kwon said the fine should be only $1 million, while the SEC insisted they pay $5.3 billion.
This article Terraform Labs agrees to pay a sky-high $4.47 billion fine to the SEC first appeared on Zombit.