The Southern District Court of New York has issued a final judgment against Terraform Labs and co-founder Do Kwon, in a high-profile lawsuit filed by the U.S. Securities and Exchange Commission (SEC).

The ruling found the defendants in violation of multiple securities regulations and imposed severe penalties and restrictions on their future activities. The penalties include total fines of approximately $4.5 billion.

According to a June 12 court filing, the amount includes $3.6 billion in disgorgement of illegal profits, $467 million in pre-judgment interest and $420 million in civil penalties.

Kwon is jointly liable for $110 million in illegal profits disgorgement and $14.3 million in pre-judgment interest.

Additionally, Kwon must transfer various assets, including ownership of PYTH tokens and other assets, into Terraform's bankruptcy estate. These assets will be used to pay fines and distributed to aggrieved investors through a liquidation fund.

The order allows Terraform Labs to treat the money owed as an unsecured debt in its bankruptcy case, meaning the SEC will receive the money through a distribution when Terraform Labs' Chapter 11 bankruptcy plan takes effect. effective and based on delivery priorities.

The SEC is authorized to enforce the court's judgment using all approved recovery procedures, including civil penalties if Kwon fails to comply with the transfer orders within 30 days of the judgment.

Kwon must also pay $204.3 million in separate remedies in addition to his liability in the Terraform Labs payments, including $110 million in disgorgement of illegal profits, $14.3 million in prepaid profits judgment and an additional $80 million in civil penalties.

Prohibit most activities

The order also prohibits Terraform Labs and Do Kwon from violating anti-fraud regulations under Article 10(b) of the Exchange Act and Article 17(a) of the Securities Act.

Furthermore, Terraform Labs and Kwon are permanently prohibited from trading in unregistered securities, trading in crypto securities, or encouraging others to trade in crypto securities, along with other related restrictions.

The restrictions allow Terraform to carry out certain transactions related to its bankruptcy case. The company can dispose of crypto in its bankruptcy estate with court approval, subject to destroying wallet keys and burning tokens as required. It may also allow third parties to withdraw, unstake and settle positions on its platforms.

The order also permanently prohibits Kwon from serving as an officer or director of any issuer that is a registered security or subject to reporting obligations.

The SEC began its case against Terraform Labs and Kwon in February 2023, alleging that the company defrauded crypto investors, including through its collapsed stablecoin Terra USD (UST). The court concluded that the defendants committed fraud in April this year.


Source: https://tapchibitcoin.io/toa-an-hoa-ky-ra-phan-quyet-cuoi-cung-chong-lai-terraform-labs-va-do-kwon-ap-dat-khoan-phat- 45-ty.html