Kwon Do Hyung and Terraform Labs agreed to pay a fine of $4.47 billion to the U.S. Securities and Exchange Commission (SEC). This is in response to a loss of $40 billion caused by the Terra-Luna stablecoin cryptocurrency collapse in 2022. Stablecoin is a cryptocurrency whose value is pegged to the U.S. dollar.
According to media outlets such as the Financial Times (FT) and The Wall Street Journal (WSJ), the SEC announced on the 12th (local time) in documents submitted to the Manhattan Federal Court in New York that Terraform agreed to pay a fine of $4.47 billion. Terraform also agreed to a prohibition on activities related to crypto asset securities trading.
The SEC assessed in a letter submitted to the court that if this agreement is confirmed by a judgment, the victims will receive maximum compensation and Terraform will be permanently barred from conducting business.
Terraform and Kwon were found guilty by a jury of the Manhattan Federal Court in a civil lawsuit brought by the SEC last April.
The jury sided with the SEC on allegations that they had committed cryptocurrency fraud and caused billions of dollars in losses.
Kwon will also personally pay a fine. Terraform agreed to pay $4.47 billion, while Kwon agreed to pay $240 million.
Kwon is also prohibited from working or serving as a director at any listed company.
According to the agreement reached on that day, Terraform must receive approval for a liquidation plan separate from Chapter 11 bankruptcy protection from the Delaware court. Additionally, Kwon must send a minimum of $240 million to the company’s bankruptcy trustee to ensure that this money is distributed to investors.
