Turner Wright2 hours agoSEC seeks $5.3B judgment against Terraform Labs and Do KwonAfter a jury found Terraform Labs and Do Kwon liable for fraud in its case with the SEC, the commission filed a motion requesting $5.3 billion in disgorgement and civil penalties.763 Total views1 Total sharesNewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksThe United States Securities and Exchange Commission (SEC) has filed a motion requesting billions of dollars in disgorgement and civil penalties against Terraform Labs and its co-founder Do Kwon following a verdict in its civil case.
In an April 19 filing in U.S. District Court for the Southern District of New York, the SEC requested Kwon and Terraform pay roughly $4.7 billion in disgorgement and prejudgment interest after the civil case ruling, as well as a combined $520 million in civil penalties — $420 million from Terraform and $100 million from Kwon. The commission, Terraform and Kwon filed their briefs for potential remedies in the civil case simultaneously, with the crypto firm suggesting a maximum civil penalty of $3.5 million and Kwon proposing only $800,000.Source: Courtlistener
In addition to the monetary judgment, the SEC proposed barring Kwon from serving as an officer or director of a securities issuer and providing complete details of his accounts and assets. If approved, Terraform would also have a “conduct-based injunction” imposed on the firm to prevent “engaging in essentially the same behavior that led to the massive fraud.” The proposed remedies and civil judgment have yet to be ruled on by a judge.
“Defendants have not shown remorse for their conduct, nor can there be any doubt that they are in position where additional violations are not only possible but likely are already occurring,” said the SEC filing. “The Court should send an unequivocal message that this sort of brazen misconduct, and Defendants’ misbegotten attempt to excuse their behavior by crafting new rules and standards of behavior for crypto markets in contravention of the federal securities laws [...] will not be tolerated.”
On April 5, a jury found Terraform and Kwon liable for defrauding investors regarding statements over the offer and sale of TerraUSD (UST), Luna (LUNA) and wLUNA. A Terraform spokesperson said at the time that the firm was “carefully weighing [its] options and next steps.” Cointelegraph reached out to Terraform regarding the April 19 filing but did not receive a response at the time of publication.
Related:Terraform Labs was ‘built on lies’ — SEC at trial
The SEC trial went forward without the presence of Kwon, who is currently embroiled in court proceedings in Montenegro. The Terraform co-founder was arrested in March 2023 for using falsified travel documents while attempting to leave the country.
Though later released and allowed to travel within Montenegro, the question of Kwon’s extradition to either the U.S. or South Korea remained unanswered at the time of publication. He faces potential criminal charges in both countries.
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