SEC seeks $5.3B judgment against Terraform Labs and Do Kwon
After a jury found Terraform Labs and Do Kwon liable for fraud in its case with the SEC, the commission filed a motion requesting $5.3 billion in disgorgement and civil penalties.
The United States Securities and Exchange Commission (SEC) has filed a motion requesting billions of dollars in disgorgement and civil penalties against Terraform Labs and its co-founder Do Kwon following a verdict in its civil case.
In an April 19 filing in U.S. District Court for the Southern District of New York, the SEC requested Kwon and Terraform pay roughly $4.7 billion in disgorgement and prejudgment interest after the civil case ruling, as well as a combined $520 million in civil penalties — $420 million from Terraform and $100 million from Kwon. The commission, Terraform and Kwon filed their briefs for potential remedies in the civil case simultaneously, with the crypto firm suggesting a maximum civil penalty of $3.5 million and Kwon proposing only $800,000.
In addition to the monetary judgment, the SEC proposed barring Kwon from serving as an officer or director of a securities issuer and providing complete details of his accounts and assets. If approved, Terraform would also have a “conduct-based injunction” imposed on the firm to prevent “engaging in essentially the same behavior that led to the massive fraud.” The proposed remedies and civil judgment have yet to be ruled on by a judge.
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Author: Turner Wright
