TERRA AGREES TO $4.5 BILLION SETTLEMENT WITH SEC IN FRAMEWORK CASE
- Terraform Labs agreed to pay nearly $4.5 billion to the SEC, pending court approval, for its role in a massive securities fraud case.
- The agreement includes approximately 3.5 billion dollars in compensation, 460 million dollars in pre-judgment interest and 420 million dollars in civil penalties. Former CEO Do Kwon will pay another $200 million to Terraform's bankruptcy estate.
- The SEC noted the magnitude of the fraud, stating that the decision provides significant corrective, punitive and deterrent measures and offers a meaningful recovery for investors who lost billions of dollars.
- The SEC emphasized that penalties will deter future fraud schemes and reinforced that those who engage in such activities will ultimately be held accountable.
- As part of the decision, Do Kwon was banned from serving as a director or executive in any public company.
- If approved, the deal would end the SEC's legal battle with Terraform Labs following the collapse of stablecoin TerraUSD in 2022, which wiped billions of dollars from the crypto market.
