Terraform Labs and CEO Do Kwon have agreed to settle a fraud case with the U.S. Securities and Exchange Commission (SEC), as per recent court filings. The settlement terms should be finalized by June 12, 2024. The SEC accused Terraform and Kwon of misleading promotion and sale of crypto tokens, particularly Terra USD (UST) and related tokens. The SEC is seeking approximately $5.3 billion in penalties, while Terraform Labs proposed a $1 million penalty. The SEC also proposed a ban on Kwon's roles in any securities-issuing entity. Kwon was arrested in March 2023 for falsifying travel documents.