According to a court entry, Terraform Labs and its co-founder, Do Kwon, have reached a 'settlement in principle' with the US Securities and Exchange Commission (SEC).

In a significant development, Terraform Labs and its co-founder Do Kwon have reached a pivotal turning point in their legal feud with the U.S. Securities Exchange Commission (SEC), as revealed by a recent court entry.

As per the filing made on Thursday, a telephone conference held on Wednesday, without recording, led to the cancellation of a previously scheduled oral argument on May 29.

The oral argument previously set for 5/29/2024 has been cancelled because the parties have informed the Court that they reached a settlement in principle," stated the filing. "The parties must file, by 6/12/2024, papers in support of a proposed final judgment consistent with the settlement.

The SEC had charged Terraform and Kwon in February 2023 over the algorithmic stablecoin Terra USD (UST), which had collapsed a year prior. Recently, both sides were embroiled in a dispute over fine amounts. Terraform and Kwon's lawyers argued for fines closer to $1 million, while the SEC proposed a significantly higher fine of $5.3 billion.

The trial against the SEC commenced for Terraform in late March, with Kwon notably absent. In April, a jury concluded that both Terraform and Kwon had misled investors and were held liable for civil fraud. The jury's deliberation centered on the SEC's allegations that Kwon and Terraform had violated federal securities laws through fraudulent activities associated with the buying and selling of Terraform securities.

Meanwhile, Kwon, the former executive, remains entangled in a legal tug-of-war over extradition to the U.S. or South Korea. He was apprehended in Montenegro in March 2023 for using a counterfeit passport while attempting to depart the country.

Source- The Block

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