Terraform Labs And Do Kwon Settle SEC Fraud Allegations In Civil Case

by

As a seasoned crypto investor, I’ve seen my fair share of market volatility and regulatory crackdowns. The recent developments in the Terraform Labs case have left me feeling uneasy, especially given the severity of the allegations and the potential financial implications for those involved.

According to Reuters, Singaporean company Terraform Labs and its founder Do Kwon have reached a preliminary agreement with the US Securities and Exchange Commission (SEC) in their contentious civil fraud lawsuit.

SEC Scores Victory

In February 2023, the SEC filed a lawsuit against Terraform Labs and Do Kwon, alleging they masterminded a significant cryptocurrency fraud. The scheme involved the selling of several digital assets, primarily LUNA and Terra USD (UST), which functioned as an algorithmic stablecoin.

The regulatory body accused the defendants of deceiving investors regarding the reliability of TerraUSD and making a false statement that Terraform’s blockchain had been seamlessly merged with a widely-used Korean mobile wallet application.

As a dedicated researcher following the developments in securities regulation, I’m thrilled about the latest jury decision that holds the defendants accountable for their fraudulent actions. This outcome significantly bolsters the Securities and Exchange Commission (SEC) in its relentless pursuit of combating deceitful practices within the digital asset sector.

After the court’s decision, the Securities and Exchange Commission (SEC) submitted a request asking for billions of dollars in returns and fines against Terraform Labs and Do Kwon.

Based on the SEC’s filing on April 5, 2024, the jury rendered a decision in favor of the Securities and Exchange Commission on all charges. In light of this verdict, the SEC is requesting remedies including an injunction against Terraform Labs and Do Kwon to halt any future infringements upon securities laws. Furthermore, the SEC seeks compensatory damages totaling around $4 billion, $545 million in pre-judgment interest, a civil penalty of $420 million for Terraform Labs, and $100 million for Do Kwon.

Terraform Labs Faces Crypto Transaction Ban

The SEC’s proposal includes a request for an injunction that would prevent Terraform Labs from taking part in cryptocurrency transactions or actions encouraging such activities.

The Securities and Exchange Commission (SEC) is proposing two actions against Do Kwon and Terraform Labs: a bar preventing them from serving as officers or directors of any public company, and a decree stating that the penalties for fraud imposed on Terraform Labs are non-dischargeable in bankruptcy proceedings.

Terraform Labs and Do Kwon have each put forward their own proposed fines as civil penalties. The former is asking for a maximum fine of $3.5 million, while the latter requests a penalty of $800,000.

The judge, Jed Rakoff of the Manhattan District Court, is presently reviewing the proposed settlement agreement between the SEC and the defendants. He has called for the submission of additional documentation from both parties by the 12th of June prior to rendering his approval.

As a crypto investor, I’m closely monitoring the ongoing legal proceedings. The resolution of this case could shape future regulatory decisions and investor safeguards in the cryptocurrency market.

Terraform Labs And Do Kwon Settle SEC Fraud Allegations In Civil Case

As a crypto investor, I’m excited to note that at the moment of writing this, Terra Luna Classic’s native token, LUNC, is showing a robust recovery, trading at $0.0001224 – a nearly 5% surge within just the past 24 hours.

The price spike aligns with the token’s steady rise over the last month, representing a 24% gain during this timeframe. Furthermore, there’s been a substantial 115% surge in trading activity compared to the previous trading day.

Read More

2024-05-31 01:11