Singapore-based Terraform Labs has reached a multi-billion dollar settlement deal with the US securities watchdog.
Terraform Labs and Do Kwon have agreed to pay over $4.5 billion in a civil settlement, according to a statement by the US Securities and Exchange Commission (SEC), following a jury verdict that held them liable for defrauding crypto investors who lost an estimated $40 billion during the collapse of TerraUSD and Luna tokens.
«Terraform and Kwon fought our efforts to investigate – taking a fight over investigative subpoenas all the way to the Supreme Court,» said SEC chair Gary Gensler. «Thankfully, with this settlement, the victims of their massive fraud will now get some justice.»
Deal Breakdown
As part of the settlement, Terraform agreed to pay over $4 billion in disgorgement plus interest alongside a $420 million civil penalty. Kwon will pay $124 million in disgorgement and interest with an $80 billion civil fine.
«Do Kwon and Terra orchestrated one of the largest securities frauds in US history by, among other things, falsely claiming that they had achieved the Holy Grail of crypto: a non-illicit use case. As the jury found, that was a lie, as was their claim of creating an ‘algorithmic stablecoin,’» Gensler added.
