Update Terraform led by Do Kwon to Pay 447 Billion Fine in SEC Case

Breaking News: Terraform Labs and Founder Do Kwon to Pay $4.47 Billion Fine in SEC Case
In a groundbreaking decision, Terraform Labs, and its creator, Do Kwon, have agreed to pay a hefty $4.47 billion fine to the United States Securities and Exchange Commission (SEC).
This resolution follows a prolonged legal battle and negotiations stemming from the collapse of the Terra-Luna stablecoin ecosystem, which resulted in a staggering $40 billion loss in the cryptocurrency market.
Initially found guilty of fraud related to the Terra-Luna crash, Terraform Labs and Do Kwon attempted to reduce the fines to $1 million through legal efforts. Despite this, the SEC remained steadfast in seeking billions in penalties. The settlement announced today includes a substantial financial penalty, potentially avoiding further legal disputes and additional sanctions.
The settlement involves disgorgement fines of approximately $3.6 billion, a civil penalty of $420 million, and nearly $467 million in prejudgment interest. Additionally, Do Kwon is accountable for $110 million in disgorgement penalties and around $14.3 million in prejudgment interest fines as per the settlement terms.
As part of the agreement, all crypto assets owned by the Luna Foundation Guard and Do Kwon’s PYTH token holdings will be transferred to cover the costs of the disgorgement fines and prejudgment interest. Any surplus from the sale of these assets will be put towards the civil penalty fines.
In April, Terraform Labs and Do Kwon’s legal team contested the SEC’s proposed $5.3 billion fine, advocating for a reduced penalty of $1 million. Despite their arguments, the SEC persisted in pursuing substantial fines to enforce compliance in the crypto sector.
The SEC’s actions against Kwon and Terraform Labs were a result of the collapse of their algorithmic stablecoins, TerraUSD, and Luna, causing significant losses in the cryptocurrency market. The SEC accused Kwon and his company of making false and misleading statements, leading to devastating losses for investors.
In a potential settlement reached in May, Terraform Labs and Do Kwon agreed in principle with the SEC, ultimately avoiding further legal battles with the final agreement that includes a significant financial penalty of $4.47 billion.
SEC Chair Gary Gensler emphasized the importance of this case in setting a precedent for regulatory compliance in the crypto industry. Former head of communications at Terraform, Brian Curran, revealed the challenges faced while working with Do Kwon, highlighting the deceptive practices within the company.
As of now, Terraform has accepted responsibility, confirming the allegations made by Gary Gensler. Do Kwon remains in detention in Montenegro, facing potential extradition to the U.S. or South Korea.