According to The Block, the U.S. Securities and Exchange Commission (SEC) submitted a proposed final consent judgment on Wednesday, requesting approval from Judge Jed Rakoff of the Southern District of New York federal court.
Under the proposed judgment, Terraform Labs has agreed to settle with the SEC and will pay a fine of $4.47 billion, including $3.58 billion in illegal profits and $420 million in civil penalties. In addition, founder Do Kwon will be prohibited from serving as a senior executive or director of any public company. The SEC stated that Do Kwon will also have to pay approximately $204 million to the “Terraform Labs bankruptcy estate for distribution to harmed investors.
The U.S. Securities and Exchange Commission stated in a court filing:
The U.S. Securities and Exchange Commission charged Terraform and Kwon in February 2023, after the stablecoin Terra USD (UST) collapsed a year ago, alleging that the company maliciously deceived and misled investors. Just a few months ago, the two parties were still disputing the amount of the fine. Terraform and Kwon’s lawyers argued that the fine should only be $1 million, while the SEC insisted on them paying $5.3 billion.