SEC Proposes Massive $5.3 Billion Penalty for Terraform Labs and Do Kwon

The U.S. Securities and Exchange Commission (SEC) has proposed a hefty $5.3 billion penalty against Terraform Labs and its co-founder, Do Kwon, following a court ruling finding them liable for fraud.

This substantial penalty comprises approximately $4.7 billion in disgorgement and prejudgment interest, along with $520 million in civil penalties. The SEC also seeks to bar Do Kwon from serving as an officer or director of any securities-issuing company and has requested the disclosure of his personal financial information.

Terraform Labs and Do Kwon had previously submitted their own proposal for significantly lower fines, suggesting a maximum penalty of $3.5 million for Terraform Labs and $800,000 for Do Kwon. Do Kwon currently remains in Montenegro, and the final outcome will depend on the court's decision.