LIVE
LUNA Price Skyrockets Amid Terraform Labs’ Settlement with SEC
Terraform Labs and its co-founder, Do Kwon, have reached a “settlement in principle” with the U.S. Securities and Exchange Commission (SEC) in a civil fraud case. The SEC previously accused Terraform and Kwon of deceiving their investors about the stability of their products, which resulted in the collapse of their $40 billion ecosystem in May 2022.
A recent court filing says a conference was held on May 29, confirming that all parties agreed to settle the case, leading to the cancellation of priorly scheduled oral arguments. Thus, the parties are supposed to file the settlement documentation by June 12 and present it before Judge Jed S. Rakoff.
LUNA Token Surge
The news of the settlement had vivid impacts on the market, specifically on the LUNA token of Terraform, which witnessed a significant surge of up to 38%—the highest it has surged since April 12. This drastic surge in the LUNA token’s value indicates investor optimism after the settlement announcement. Besides, the expectation of resolving the legal uncertainties of Terraform Labs has successfully ensured a temporary sense of relief and optimism among stakeholders and investors.
Do Kwon’s Legal Troubles Continue
Although there is progress in settling the civil case with the SEC, the legal challenges of Do Kwon aren’t over yet. Currently, Kwon is out on bail in Montenegro, awaiting an extradition to either the U.S. or South Korea, where he is alleged to have additional criminal charges. In another development, the SEC initially proposed to give a heavy $5.3 billion penalty for resolving the fraud case, which would also mark as the most substantial fine on a crypto project.
Amidst the bankruptcy proceedings, Terraform Labs has contested the penalty, demanding a more appropriate civil fine since its remaining assets are approximately $150 million. Hence, as the legal battle continues, Kwon’s future remains uncertain, with crucial repercussions for him and the broader cryptocurrency market.
