- The SEC claimed that Do Kwon and Terraform owed around $4.7 billion in prejudgment interest and disgorgement, in addition to $420 million and $100 million in civil penalties, respectively.
- Attorneys argue the amount ought to be more like $1 million.
Attorneys for Do Kwon, the co-founder of Terraform Labs, and the company claim that a fine of about $1 million, rather than the $5.3 billion that the US Securities and Exchange Commission had suggested, is more fitting following the company’s conviction for fraud.
Their request comes one week after the SEC declared that Kwon and Terraform were liable to pay around $4.7 billion in disgorgement and prejudgment interest, as well as $420 million and $100 million in civil penalties, respectively.
The attorneys representing Kwon and Terraform stated as much in a late-week court statement that the sum ought to be substantially lower.
The attorneys concluded by saying that the Court ought to deny TFL any disgorgement or injunctive relief and should only fine the company a maximum of $1 million in civil penalties.
In February 2023, the SEC filed charges against Terraform and Kwon regarding the algorithmic stablecoin Terra USD (UST), which saw a sharp decline in value just a year prior.
Algorithmic stablecoins employ algorithms and market incentives to keep prices steady. To maintain price stability, Terra was connected to Luna, a governance token. In May 2022, UST plummeted, erasing about $50 billion in value.
A jury earlier this month determined that Kwon and Terraform had deceived investors and were both guilty of civil fraud. The SEC’s allegations that Kwon and Terraform engaged in fraud in connection with the purchase and sale of Terraform securities constituted the primary points of contention that the jury had to consider.
The SEC claimed that Terraform and Kwon issued and sold unregistered securities, and Judge Jed Rakoff had previously given summary judgment in support of the SEC.
A Terraform representative stated that the company was carefully considering our options and the next course of action at the time of the ruling.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
