Terraform Labs and its Founder, Do Kwon, have reached
a settlement with the US Securities and Exchange Commission (SEC) following
allegations of fraud surrounding the collapse of the stablecoin TerraUSD,
Reuters reported. The agreement, disclosed on a court website, arrived after a
jury found Kwon and Terraform Labs liable for civil fraud charges in April.
The SEC had accused the company and Kwon of misleading
investors in 2021 about the stability of TerraUSD, a stablecoin designed to
maintain its value to $1. Additionally, they were accused of falsely claiming
that Terraform’s blockchain was utilized in a popular Korean mobile payment
app.
The settlement, though its terms remain undisclosed,
marks a significant development in the ongoing legal saga between Terraform
Labs, Do Kwon, and the SEC. US District Judge Jed Rakoff in Manhattan has
requested supporting documents from both parties by June 12.
Initially, the SEC sought substantial penalties,
including relinquishing $5.3 billion in alleged ill-gotten gains from
stablecoin sales, fines totaling hundreds of millions of dollars, and
a ban on dealing in crypto asset securities for both Kwon and Terraform Labs.
The collapse of TerraUSD and Luna, a token closely
tied to TerraUSD, affected the cryptocurrency markets in May 2022, resulting in
an estimated loss of over $40 billion for investors. Despite the settlement,
Kwon still faces related criminal charges in both the US and South Korea,
though he maintains his innocence.
Expect ongoing updates as this article evolves.
Terraform Labs and its Founder, Do Kwon, have reached
a settlement with the US Securities and Exchange Commission (SEC) following
allegations of fraud surrounding the collapse of the stablecoin TerraUSD,
Reuters reported. The agreement, disclosed on a court website, arrived after a
jury found Kwon and Terraform Labs liable for civil fraud charges in April.
The SEC had accused the company and Kwon of misleading
investors in 2021 about the stability of TerraUSD, a stablecoin designed to
maintain its value to $1. Additionally, they were accused of falsely claiming
that Terraform’s blockchain was utilized in a popular Korean mobile payment
app.
The settlement, though its terms remain undisclosed,
marks a significant development in the ongoing legal saga between Terraform
Labs, Do Kwon, and the SEC. US District Judge Jed Rakoff in Manhattan has
requested supporting documents from both parties by June 12.
Initially, the SEC sought substantial…
