Terraform set to pay $4.47 billion in settlement to the SEC over lawsuit
- Terraform and its co-founder, Do Kwon, have agreed to pay the SEC a $4.47 billion settlement.
- The settlement will involve a discharge fee of $3.58 billion with a civil penalty of $420 million.
- LUNC is up 2% after a week-long downtrend of 11%.
Terraform Labs reached an agreement with the Securities & Exchange Commission (SEC) on Wednesday to pay a settlement fee of $4.47 billion over a civil fraud lawsuit.
SEC files for settlement with Terraform Labs
Terraform Labs, the company behind the failed LUNA and TerraUSD, with co-founder Do Kwon, have agreed to a settlement with the SEC over a lawsuit for violating securities laws. The report is based on the SEC filing to the United States District Court of New York earlier today.
Read more: Do Kwon, Terraform Labs found liable for misleading investors before UST stablecoin collapse
The settlement involves disgorgement totaling $3.5 billion and a pre-judgment interest of $466 million, which totals $4.47 billion for the company to pay. Do Kwon was also charged a settlement fee totaling $204 million.
The settlement deal would also prohibit Kwon and Terraform Labs from selling or acquiring cryptocurrency assets, including tokens within the Terra ecosystem.
Terraform's case with the SEC dates back to February 2023, when the SEC accused the company and Do Kwon of unregistered securities sales, which violated securities laws. They were also accused of defrauding investors using their stablecoin.
After a year in court, the two parties resolved to settle the case late in May and will await approval from the district court before carrying on with payments.
Read more: South Korea beats the US to Do Kwon extradition as court cites ‘first-come-first-serve’
Following the settlement, Terra Luna Classic (LUNC) is up on the day, with a 3.73% rise at the time of writing. This may be due to the latest proposal for a new burn tax distribution demanded by the community. The token is currently recovering from a weekly downtrend of 11%.
Author
Michael Ebiekutan
FXStreet
With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addi
