Terraform Labs Reaches Settlement with SEC in Civil Fraud Case ๐ก๏ธ
Singapore-based Terraform Labs and founder Do Kwon have reportedly reached a “tentative settlement” with the US Securities and Exchange Commission (SEC) after a high-profile civil fraud case. The SEC initially filed a lawsuit in February 2023, accusing Terraform Labs and Kwon of orchestrating a large crypto scam involving the sale of digital assets, particularly LUNA and Terra USD. The SEC alleged that the defendants misled investors about TerraUSD’s stability and falsely claimed integration into a Korean mobile payment app.
SEC Scores Victory ๐
- The SEC filed a motion seeking billions in disgorgement and civil penalties against Terraform Labs and Do Kwon after a jury verdict found them liable for fraud.
- The regulator aims to prevent future violations by requesting an injunction, joint disgorgements of $4 billion, prejudgment interest, and civil penalties.
Terraform Labs Faces Crypto Transaction Ban ๐ซ
- The SEC also seeks a conduct-based injunction to prevent Terraform Labs from engaging in crypto transactions or activities that could induce such dealings.
- A bar against Do Kwon, and a nondischargeable monetary sanctions declaration for Terraform Labs in bankruptcy is requested by the SEC.
Proposed Civil Penalties ๐
- Terraform Labs and Do Kwon have submitted their own proposed civil penalties, with Terraform Labs seeking a $3.5 million penalty and Do Kwon requesting $800,000.
- The settlement agreement is pending approval from US District Judge Jed Rakoff, who has requested supporting documents by June 12.
Implications for Crypto Community ๐
- The outcome of this case could significantly impact future regulatory actions and investor protection measures within the cryptocurrency landscape.
- The legal proceedings are closely monitored for their potential consequences on the industry.
Market Performance ๐
- At present, Terra Luna Classic (LUNC) is trading at $0.0001224, showing a 5% rebound in the last 24 hours.
- Over the past month, the token has marked a 24% growth and an 115% increase in trading volume compared to the previous day.
Hot Take ๐ถ๏ธ
A significant development in the case as Terraform Labs and Do Kwon reach a tentative settlement with the SEC, marking a pivotal moment in the ongoing legal proceedings that could shape future regulatory actions within the crypto industry.
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