The Battle of Terraform Labs Against SEC’s Huge Penalty
The US SEC has recently imposed a massive $5.3 billion penalty on Terraform Labs and its co-founder, Do Kwon, in disgorgement and civil penalties. However, Terraform’s legal team is pushing back against this amount, arguing that it is excessive. They are suggesting that the maximum civil penalty should be capped at $1 million. The crux of their argument lies in the fact that funds held by the Luna Foundation Guard (LFG), which is not directly involved in the SEC’s civil case, would be affected if disgorgement is pursued against Terraform.
Terraform’s Counterattack on the SEC’s Unfair Demand
In response to the SEC’s motion seeking a $5.3 billion penalty, Terraform’s lawyers have filed a motion opposing the proposed penalties. They are contending that injunctive relief or disgorgement should not be granted by the court. Additionally, they are advocating for any penalties to be limited to a $1 million civil penalty. Furthermore, Do Kwon’s legal team is pushing back against the demand to provide full details of his accounts and assets, citing his Fifth Amendment rights against self-incrimination.
- The court should not grant injunctive relief or disgorgement
- Penalties should be limited to a maximum of $1 million civil penalty
- Do Kwon’s legal team opposes disclosing account and asset details due to Fifth Amendment rights
During the legal proceedings, Do Kwon was unable to attend due to travel restrictions following his arrest in Montenegro in March 2023 for using falsified travel documents. While the decision to extradite him to South Korea has been suspended by Montenegro’s Supreme Court, there is a possibility that he may now face trial in New York instead.
Terraform and Ripple: Fighting Back Against the SEC’s Enforcements
Terraform and Ripple find themselves in a legal battle with the SEC over alleged violations. The SEC took action against Terraform and Kwon in February 2023 concerning the algorithmic stablecoin Terra USD (UST). Following a two-week trial in April, a jury found them guilty of defrauding investors. However, Judge Jed Rakoff is yet to deliver a ruling on the proposed remedies.
On the other hand, Ripple has challenged the SEC’s proposal of a $2 billion fine. Brad Garlinghouse, Ripple’s CEO, has expressed his discontent with the SEC’s demands, highlighting the absence of precedent for such a substantial fine.
Will the big players in the crypto world succumb to the SEC’s pressure or will they emerge victorious in this battle? Keep an eye on the developments to witness the outcome!
Hot Take: Brace Yourself for the Crypto Legal Turmoil Ahead
The landscape of crypto regulations is becoming increasingly intense, with regulatory bodies imposing hefty penalties on prominent players in the industry. Will Terraform Labs and Ripple be able to navigate through these legal challenges unscathed, or will they have to face the consequences of non-compliance? Stay informed and vigilant as the crypto legal saga continues to unfold.
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