SEC Fines Terraform Labs $4.47 Billion After Being Found Guilty by Jury
The now-bankrupt cryptocurrency firm Terraform Labs has reportedly reached a massive $4.47 billion deal with the US Securities and Exchange Commission for its TerraUSD/LUNA scam. The controversial company and its once-fugitive founder, Do Kown, were found guilty by an American jury of defrauding crypto investors who lost a whopping $40 billion when its native tokens Terra USD (TUSD) and LUNA collapsed.
The once-successful cryptocurrency project was worth tens of billions in 2022, and many digital currency investors were heavily involved in it. However, the unsustainable nature and greed of top executives like Do Kwon resulted in a massive collapse, causing deep economic troubles for its backers. All in all, the crypto lost 99.999% of its value.
The Final Judgment
The final judgment was proposed by the SEC and needs final approval by a district judge before it can be implemented. The judgment entails $4.05 billion of disgorgement plus a further $420 million fine for the company. A further $80 million is expected to come personally from Do Kwon, which brings the total settlements valuation to $4.55 billion, one of the highest in the history of crypto.
Do Kwon faces a long jail sentence in addition to the fine. He also agreed not to participate in cryptocurrency transactions again. He remains in Montenegro, awaiting extradition to the United States or South Korea, his home country.
According to the SEC:
Entry of this judgment would ensure the maximal return of funds to harmed investors and put Terraform out of business for good,
Will We See Any Relief for UST or LUNA Holders?
Unfortunately, no. Unlike other settlements, including FTXs, where user funds were misused, there is hardly likely to be any relief for Terraforms users token holders. This is because the company filed for bankruptcy in January this year.
However, some payments cannot be ruled out, as Terraform Labs and Do Kwon had some hidden deposits stashed away. With the rise in Bitcoins price index, the payments can become significant, but a full dollar compensation is unlikely.
Do Kwon and former FTX CEO Sam Bankman-Fried (SBF) remain public enemy numbers 1 and 2 in crypto circles. The crypto community has suffered greatly because of their actions. SBF was sentenced to 25 years behind bars in the United States, and a similar fate is expected for Do Kwon. Both have denied wrongdoing, but the magnitude of their fraud reveals otherwise.
Read more: https://zycrypto.com/sec-fines-terraform-labs-4-47-billion-after-being-found-guilty-by-jury/
Text source: ZyCrypto
