- In their civil fraud action, Do Kwon, the creator of Terra, and Terraform Labs tentatively struck a deal with the SEC on Thursday.
Following the announcement that Terraform Labs and its creator, Do Kwon, have reached a provisional settlement with the U.S. Securities and Exchange Commission (SEC), cryptocurrencies associated with the Terra ecosystem have experienced gains overnight.
While Terra Luna Classic (LUNC), the native token of the original Terra ecosystem, has increased by 9.5% over the last day to trade at $0.0001215, Terra’s revived LUNA cryptocurrency has gained 16.3% over the last 24 hours to trade at $0.69.
According to the case’s court minutes, the parties have notified the judge that they have agreed a settlement in principle, with a deadline of June 12 for the submission of relevant documents.
The information appears on the court docket because the ongoing settlement negotiations resulted in the cancellation of a hearing that was supposed to take place on May 29.
A jury in New York determined in April that Do Kwon and Terraform Labs were accountable for civil fraud charges, concurring with the SEC’s conclusion that investors had been duped regarding the security of the algorithmic stablecoin TerraUSD (UST) within the Terra ecosystem.
The SEC had requested orders prohibiting Kwon and Terraform Labs from the securities business in addition to civil financial penalties; however, specifics of the parties’ proposed settlement have not yet been made public.
The accusations were connected to the May 2022 collapse of TerraUSD and Terra’s LUNA governance token, which resulted in losses exceeding $40 billion and set off a protracted crypto winter.
The deal only partially addresses Kwon’s legal issues. The U.S. Department of Justice (DOJ) has charged the founder of Terra with criminal fraud. In addition, he is facing accusations in his home country of South Korea for fraud, bribery, manipulating transaction volume, and breaking capital markets rules.
The U.S. and South Korea have been involved in a months-long jurisdictional dispute to extradite the creator of Terra since Kwon’s arrest in Montenegro in December 2023 on fraudulent passport charges. Requests have been authorized and denied by Montenegro’s courts on multiple occasions.
Kwon, who served a four-month sentence in prison before being released from Montenegro, must stay in the nation while he awaits extradition.
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.
