Terraform and Do Kwon's Lawyers Deny SEC's Request.

Lawyers representing Terraform Labs and its co-founder Do Kwon are objecting to the fines proposed by the U.S. Securities and Exchange Commission (SEC), arguing that a penalty closer to $1 million is more reasonable than the proposed $5.3 billion.

The SEC's proposal includes a request for approximately $4.7 billion in damages and pre-judgment interest, as well as a fine of $420 million for Terraform and $100 million for Kwon. However, lawyers representing the defendants believe these figures are quite high.

In a court filing released late last week, #Terraform and Kwon's legal team argued for a significantly lower sentence. They stated that the court should not grant injunctive relief or damages and should fine Terraform Labs (TFL) no more than $1 million.

In February 2023, the #SEC charged Terraform and Kwon over issues with the algorithmic stablecoin Terra USD (UST), which suffered a dramatic drop in value a year ago. Terra USD, affiliated with the governance token Luna, aimed to maintain price stability through algorithmic market incentives. However, in May 2022, UST collapsed, causing losses exceeding $50 billion.

A jury recently found both Terraform and Kwon liable for civil fraud based on allegations they misled investors. Among the key issues considered by the jury were the SEC's allegations that Terraform and Kwon violated federal securities laws through fraudulent activity related to the trading of Terraform securities. Additionally, Judge Jed Rakoff previously granted summary judgment to the #SEC supporting allegations that Terraform and Kwon offered and sold unregistered securities.

Following the decision, a Terraform spokesperson stated that the company is carefully considering its options and next steps in response to legal proceedings.
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