According to PANews, Terraform Labs' proxy lawyer has submitted a motion opposing the U.S. Securities and Exchange Commission's (SEC) demand for a $5.3 billion recovery and civil penalty against Terraform Labs and its co-founder Do Kwon. In a document submitted to the U.S. District Court for the Southern District of New York on April 26, Terraform's legal team suggested a maximum civil penalty of $1 million. Terraform argued that the court 'should not grant any injunctive relief or recoupment' as the funds would actually have to be obtained from the Luna Foundation Guard (LFG), which is a 'non-party' in the civil case. Terraform also stated that a $1 million civil penalty is 'much more appropriate' than the SEC's billions of dollars in fines.
On April 5, a New York jury ruled that Terraform and Do Kwon were suspected of deceiving investors in the sale statements of TerraUSD (UST), Luna, and wLUNA. The SEC subsequently filed a motion demanding the recovery of $5.3 billion in illegal proceeds and civil penalties. In addition, the SEC also proposed to ban Do Kwon from serving as an executive or director of a securities issuing company and provide detailed information about his accounts and assets.