- Do Kwon appears to have reached a preliminary settlement with the U.S. Securities and Exchange Commission (SEC).
- The case’s court docket indicates oral arguments regarding Kwon and the company’s penalties were originally scheduled for May 29th but canceled because “the parties have informed the Court that they reached a settlement in principle.”
- In April, the SEC filed a motion requesting that Kwon and Terraform Labs pay more than $4.19 billion in disgorgement plus $545.7 million in prejudgement interest.
Do Kwon and Terraform Labs Reach Preliminary Settlement with SEC Over Terra USD Collapse
Do Kwon and Terraform Labs Reach Preliminary Settlement with SEC
In a significant development in the cryptocurrency world, Do Kwon, the co-founder of Terraform Labs, appears to have reached a preliminary settlement with the U.S. Securities and Exchange Commission (SEC). This comes after a tumultuous period following the collapse of the algorithmic stablecoin Terra USD in 2022, which led to a significant downturn in crypto prices globally.
Details of the Preliminary Settlement
The court docket reveals that oral arguments regarding the penalties for Kwon and Terraform Labs were initially scheduled for May 29th. However, these were canceled as both parties informed the Court that they had reached a settlement in principle. The final judgment papers are expected to be filed by June 12th, marking a crucial step towards resolving the legal battle that has gripped the crypto community.
SEC’s Financial Demands
In April, the SEC filed a motion demanding that Kwon and Terraform Labs pay over $4.19 billion in disgorgement, along with $545.7 million in prejudgement interest. Additionally, the regulator sought a $100 million civil penalty from Kwon and a $420 million penalty from the company. These financial penalties underscore the severity of the allegations and the impact of the Terra USD collapse.
Background of the Case
Do Kwon’s legal troubles began when he was arrested by authorities in Montenegro in 2023. He was caught attempting to board a flight to the United Arab Emirates (UAE) using a forged Costa Rican passport. Kwon is currently facing extradition to both the US and South Korea, where he is wanted for his role in the $40 billion collapse of the Terra ecosystem. This case has highlighted the regulatory scrutiny facing the cryptocurrency industry and the potential consequences of non-compliance.
Conclusion
The preliminary settlement between Do Kwon, Terraform Labs, and the SEC marks a pivotal moment in the ongoing saga of the Terra USD collapse. As both parties move towards finalizing the settlement, the crypto community will be closely watching the implications for regulatory oversight and the future of algorithmic stablecoins. This case serves as a stark reminder of the importance of transparency and compliance in the rapidly evolving world of digital assets.
