Infamous bankrupt crypto firm TerraForm labs agrees to settle the case with the US SEC
TerraForm will pay a total of $4.47 billion to the US Securities regulatory body to drop the case against TerraForm labs & its co-founder.
TerraForm Labs was a popular crypto firm behind now-collapsed cryptocurrencies Terra (Luna) & TerraUSD stablecoin. TerraForm Labs co-founder Do Kwon, the main player behind the Terra crypto project, has been living his life in Montenegro since Q1 2023. Currently, the financial regulators from South Korea & US are pressuring the Montenegro authorities for the extradition of Kwon in their corresponding jurisdiction.
On 12 June 2024, Reuters reported that Terraform Labs has agreed to a $4.47 billion settlement with the U.S. Securities and Exchange Commission (SEC) after being found liable for defrauding cryptocurrency investors.
This follows a trial where TerraForm & its executives were accused of misleading investors about the stability of TerraUSD and Luna tokens, which collapsed in 2022, resulting in an estimated $40 billion in losses.
The proposed settlement, awaiting court approval, includes $4.05 billion in disgorgement plus interest, and a $420 million civil fine.
It is worth it to note that much of this may go unpaid as Terraform filed for bankruptcy in March of this year & listed its assets/liabilities between $100–$500 million.
The total judgment also includes an $80 million fine for Do Kwon, who agreed to a ban from crypto transactions and to transfer $204.3 million to Terraform’s bankruptcy estate.
The SEC believes this settlement will maximize returns to investors who lost fund in Luna & TerraUSD investment and effectively close Terraform’s operations. Terraform and Kwon have consented to the judgment, while their lawyers have not commented publicly on this matter.
Terra (Luna) price action
After the collapse of Luna coin, the TerraForm labs team relaunched a new coin Luna coin in 2022.
Following this news, the trade price of the new Luna remained unfazed.
But the trade price of Old Luna, Luna classic ($LUNC) surged 2.5%.
Read also: Curve ($CRV) Coin Crashes as Founder’s $95.7M Borrowing Sparks $22.6M Liquidation Frenzy
