As per a recent article by Bloomberg, Do Kwon, the founder of Terraform Labs, and the Securities and Exchange Commission (SEC) contested the substantial $5.3 billion penalty that was suggested in the complaint. With the argument that the majority of the company’s stablecoins were sold abroad, the corporation asked the court to impose a $1 million fine, which was a far less punishment.
Do Kwon was found guilty by a jury on April 5 of causing the collapse of Terraform, which destroyed $40 billion in investor wealth and sparked a harsh crypto winter. Despite the fact that Kwon and Terraform were found guilty of misleading investors about the sales of TerraUSD (UST), Luna (LUNA), and wLUNA, the regulators demanded disgorgement and prejudgment interest from them totaling about $4.7 billion. Furthermore, the SEC assessed a total of $520 million in civil penalties.
Though the regulators did not prove that Terraform is entitled to the expansive injunction and monetary sanctions it seeks, the platform pleaded with the court not to grant “any injunctive relief of disgorgement.” Additionally, the platform stated that the proposed fines would have to be obtained from the Luna Foundation Guard (LFG), an entity not involved in the civil case. The court document stated, “.
“In summary, the Court should impose a maximum $1 million civil penalty against TFL and should not grant any disgorgement or injunctive relief.”
Judge Jed Rakoff of the US District Court for the Southern District of New York issued an order on April 29th, directing the attorneys for the SEC, Kwon, and Terraform Labs to convene in court on May 22nd to deliberate on the suggested remedies.
May 2024, Cryptoniteuae
