U.S. Judge Signs Off on $4.5B Terraform-Do Kwon Settlement With SEC

As a seasoned crypto investor with a few battles scarred onto my digital battlefield, I can’t help but feel a mix of emotions upon hearing about this recent settlement between the SEC, Terraform Labs, and Do Kwon.

A U.S. District Court judge has approved a settlement agreement between the Securities and Exchange Commission (SEC), Terraform Labs, and its ex-CEO, Do Kwon. The terms of the settlement include large penalties totaling in billions of dollars and effective bans from the crypto industry for both parties as outlined in the court documents.

In a ruling by Judge Jed Rakoff of the Southern District of New York (SDNY), Terraform Labs’ Kwon is required to pay a total of $4.5 billion in disgorgement and civil penalties. As a consequence, he will be permanently barred from purchasing or trading “crypto asset securities,” which includes tokens from the Terra ecosystem. It remains undetermined if this restriction applies to other cryptocurrencies as well.

The SEC’s initial proposal was for a $5.3 billion settlement, which is significantly more than Terraform’s original suggestion of a $1 million civil penalty.

I’ve been keeping tabs on Kwon’s situation as he remains in Montenegrian custody, awaiting a verdict on his extradition. Sadly, he was absent during the trial where a settlement was agreed upon.

I’m currently analyzing Terraform Labs’ financial situation, which is under Chapter 11 bankruptcy protection. During the recent trial, the company’s CEO, Chris Amani, testified about their affairs. At present, they have around $150 million in assets available to them.