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Founder of #Terraform Labs Failed to Attend His Own Trial and Why
The crypto company and its founder, Do Kwon, were found guilty of fraud related to the Terra-Luna crash in early April. Their lawyers are arguing for a fine of $1 million instead of the US Securities and Exchange Commission's proposed $5.3 billion.
Following the SEC's request for a disgorgement and prejudgment fine of $4.7 billion and a total of $520 million in civil penalties for its participation in the Terra-Luna collapse, Thursday's court filing follows.
Do Kwon and Terraform Labs Fight Off Billion-Dollar Fines
The blockchain platform "should impose at most a $1 million civil penalty," according to lawyers who represented Kwon and Terraform Labs.
The lawsuit said that the SEC has not shown its entitlement to the extensive injunction and financial penalties it is seeking against TFL.
Kwon did not appear at the trial that found him guilty on April 5. The creator of Terraform Labs, on the other hand, was unable to leave Montenegro after the accident because he had used a fake passport to avoid punishment.
"Despite the many potential benefits of cryptocurrency, the absence of proper registration and compliance is having serious and tangible effects on actual individuals," said Gurbir S. Grewal, Director of Enforcement for the SEC, in a statement issued later that day. "Thanks to everyone's efforts, we will keep using all the tools we have to safeguard investors. However, the crypto markets really need to comply with our regulations."
Founder of Terraform Labs Failed to Attend His Own Trial and Why
The extradition of Kwon is a contentious issue between his home country of South Korea and the United States. The lawyers for the Terra-Luna founder are trying to have him transferred to South Korea, where the penalty is more moderate.
Ripple Labs was fined over $2 billion and Binance, a once-leading crypto exchange, was fined $4.3 billion; the SEC has been aggressively fining culpable crypto businesses as of late.
