Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.
Terraform Labs and former CEO Do Kwon have agreed to pay the SEC $4.5 billion in disgorgement, prejudgment interest and civil penalties.The agreement would also permanently ban Kwon and Terraform Labs from buying and selling crypto asset securities.
The settlement agreement, which was filed Wednesday, would also permanently ban Kwon and Terraform Labs from buying and selling crypto asset securities – including all of the tokens in the Terra ecosystem. “If approved, the proposed judgment will send an unmistakable deterrent message to not only those who engage in brazen misconduct, but also to all those who seek to evade the requirements of the federal securities laws by crafting new standards of behavior for crypto assets that fall under the purview of the federal securities laws,” the lawyers wrote. The SEC declined to comment further.
In April, a New York jury found Kwon and Terraform Labs liable on civil fraud charges brought against them by the SEC in connection with the $40 billion implosion of the Terra ecosystem in May 2022. Kwon – who is still in custody in Montenegro where he awaits a decision on his extradition to either the U.S. or his native South Korea to face criminal charges for his role in Terra’s collapse – was not in attendance for the trial.
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