SEC Seeks $5 Billion Penalty Against Do Kwon and Terraform Labs

The SEC has launched a massive legal pursuit against Terraform Labs and its co-founder, Do Kwon. Following a verdict of guilt, the SEC filed for a staggering $5.2 billion in penalties. This includes a $4.7 billion disgorgement, along with fines totaling $520 million, split between Terraform ($420 million) and Kwon ($100 million). The bombshell legal action was dropped in a New York court on April 19.

Kwon and Terraform Respond

Kwon and his company didn't take this lying down. They countered with significantly lower damage figures—$3.5 million for Terraform and a mere $800,000 for Kwon. However, this pales in comparison to the SEC's demands.

SEC Seeks Permanent Removal of Kwon: Pushes for Conduct-Based Injunction Against Terraform

But it's not just about the money. The SEC aims to remove Kwon from his position permanently. They're seeking a court order barring him from serving as a director or officer in any securities business. Additionally, they're pushing for a conduct-based injunction against Terraform to prevent similar incidents in the future. The court's decision on these matters is pending.

In the SEC's view, Kwon and his team have shown no remorse and are likely to repeat their transgressions. They're urging the court to send a clear message that violating market rules will not be tolerated.

Source:Courtlistener

The trial, which began over a year ago, uncovered Terraform and Kwon's deceptive practices regarding TerraUSD (UST), Luna, and wLUNA. This led to their guilty verdict and subsequent legal battles.

SEC Alleges Terraform's Misleading Statements and Questionable Deals as Trial Concludes

During the trial's conclusion, the SEC's lawyers highlighted Terraform's misleading statements about the stability of their algorithmic stablecoin UST and questionable app deals in South Korea. Terraform's representative, Louis Pellegrino, defended Kwon's integrity in public chats, disputing the SEC's claims.

Ongoing Drama

The saga has seen additional drama, including Kwon's arrest in Montenegro for falsifying travel documents. Currently, he remains there, awaiting potential extradition to the U.S. or South Korea. Meanwhile, other crypto figures, such as former Celsius CEO Alex Mashinsky and former Binance CEO Changpeng Zhao, are also facing legal proceedings.