The U.S. Securities and Exchange Commission (SEC) filed a "final consent judgment proposal" on Wednesday, asking Judge Jed Rakoff of the U.S. District Court for the Southern District of New York to approve the plan. Under the proposal, Terraform would pay $3.58 billion in disgorgement, a $420 million civil penalty and bar Do Kwon from being an officer or director of any public company.

Terraform fails to bargain, eventually settles

Although representatives of Terraform and Do Kwon's lawyers had repeatedly requested that the total amount of fines be significantly reduced, they finally agreed to a fine of up to 4.47 billion US dollars, including forfeiture of income, pre-judgment interest and civil penalties. The settlement agreement is still pending in New York, which is responsible for the case. Judge Jed Rakoff granted.

Do Kwon must pay at least US$204,320,196 out of his own pocket to distribute to injured investors. It is unclear what the criteria for injured investors are.

In addition, Terraform and Do Kwon will be permanently banned from trading any crypto-asset securities.

(Terraform and Do Kwon’s lawyers negotiated the price, arguing that the 5.3 billion fine should be reduced to US$1 million)

SEC: Deter perpetrators with sentences

According to CoinDesk, the SEC stated in court documents:

If approved, the proposed sentence would send a clear message of deterrence not only to those who commit wrongdoing, but also to those seeking to evade federal securities laws by setting a new standard of conduct for crypto-assets. The verdicts, including multi-billion dollar verdicts against the defendants, provide investment victims with meaningful and prompt compensation.

The trial between Terraform and Do Kwon took many twists and turns, including Do Kwon's initial absconding, the United States and South Korea later competing for extradition, and ultimately the U.S. SEC succeeded.

A spokesperson for Terraform Labs declined to comment. The company has previously stated that it is currently in bankruptcy, with only about $150 million in assets remaining. So how will Terraform repay the excessive fines?

(SEC seeks to fine Terraform Labs and Do Kwon $5.3 billion: no regrets)

This article Terraform settles with SEC for $4.5 billion fine, Do Kwon has to pay $200 million out of pocket first appeared on Chain News ABMedia.