Terraform settles with SEC for $4.5 billion! Do Kwon needs to pay $200 million out of pocket

The U.S. Securities and Exchange Commission (SEC) submitted 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. According to the proposal, Terraform will pay US$3.58 billion in ill-gotten gains, a US$420 million civil penalty, and prohibit Do Kwon from becoming an executive or director of any public company.

Terraform bargaining failed and the final settlement

Although Terraform and Do Kwon’s legal representatives had repeatedly requested that the total fine be significantly reduced, they finally agreed to a fine of up to 4.47 billion US dollars, including confiscation of income. , prejudgment interest and civil penalties. The settlement agreement is still subject to approval by New York Judge Jed Rakoff, who is responsible for the case.

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 standards for injured investors are.

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

SEC: Sentences to deter perpetrators

According to CoinDesk, the SEC stated in court documents: If approved, the proposed sentence will not only send a clear deterrent to those who commit crimes message and also sends a clear message to those seeking to set new standards of conduct for crypto-assets in order to evade federal securities laws. 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, and the United States and South Korea later competing for extradition. In the end, 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 US$150 million in assets remaining. So how will Terraform repay the excessive fine?

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