After a jury found Terraform Labs and co-founder Do Kwon liable for fraud in a case with the United States Securities and Exchange Commission (SEC), a federal judge ordered the parties to discuss proposed remedies ranging from millions to billions of dollars.
In an April 29 filing in the U.S. District Court for the Southern District of New York, Judge Jed Rakoff said lawyers representing the SEC, Kwon and Terraform should appear in court on May 22 to present arguments for proposed remedies after the jury verdict. All parties have already submitted filings on their respective requests for disgorgement and civil penalties, but Judge Rakoff’s order allowed supplements before the court appearance.
Related: Do Kwon appeals Montenegrin court decision, claiming ‘unfounded and illegal’ interpretation
Source: Courtlistener
The SEC requested Kwon and Terraform pay roughly $4.7 billion in disgorgement and prejudgment interest and a combined $520 million in civil penalties. Terraform’s legal team suggested a $1 million civil penalty and no “injunctive relief or disgorgement.” Both parties will have until May 6 and May 1, respectively, to file supplements to their existing proposals.
Related: Do Kwon appeals Montenegrin court decision, claiming ‘unfounded and illegal’ interpretation
On April 5, a jury found Terraform and Kwon liable for defrauding investors after a two-week trial with the SEC. Kwon could not attend the trial in person due to his 2023 arrest in Montenegro for using falsified travel documents. The Terraform co-founder remains in the country as its courts weigh extradition requests from the U.S. and South Korea, and at the time of publication, it was unclear if he will be able to go to the U.S. court on May 22.
Bankruptcy proceedings for Terraform have been ongoing since the company filed for Chapter 11 protection in January. The firm reported between $100 and $500 million in estimated liabilities and assets at the time.
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