BlockBeats news, September 20, Reuters reported that Terraform Labs received court approval on Thursday to end its business in bankruptcy after the company agreed to settle a lawsuit from the U.S. Securities and Exchange Commission. The lawsuit accused the company of defrauding cryptocurrency investors who lost about $40 billion when TerraUSD and Luna tokens collapsed in 2022.
Terraform estimates that it will pay about $184.5 million to $442.2 million to stakeholders as part of the bankruptcy.
In February 2023, the SEC filed charges against Terraform and its co-founder Do Kwon over Terra USD (UST), an algorithmic stablecoin that collapsed a year ago. The agency said the company defrauded and misled investors.
Before the settlement, the two sides argued over the amount of the fine. Lawyers for Terraform and Kwon said the fine should be closer to $1 million, while the SEC proposed they pay $5.3 billion.
