Bitrabo Editorial
Terraform Labs, the company involved in a significant collapse in 2022, has agreed to pay a substantial settlement of $4.47 billion to resolve a civil lawsuit filed by the US Securities and Exchange Commission (SEC).
Following the collapse, which led to the loss of $40 billion in investor assets and shook the cryptocurrency industry, the SEC took legal action.
Terraform Labs And Do Kwon Responsible For Collapse
After a two-week trial where a jury found the company and its co-founder, Do Kwon, liable for the collapse, the SEC sought approval for the settlement from a federal judge in New York.
As stated in the settlement filing, Kwon’s payment of monetary remedies would be considered met if specific transfers are made to the SEC and the Terraform bankruptcy estate.
SEC’s Triumph
The SEC alleged that Terraform Labs and Kwon engaged in fraudulent activities between April 2018 and May 2022, offering and selling crypto asset “securities in unregistered transactions” and causing a market value loss of at least $40 billion.
Regulators further accused the defendants of misleading investors about TerraUSD’s stability and falsely claiming integration into popular Korean mobile payment apps.
This development marks a success for the US SEC, with Terraform Labs and founder Do Kwon, facing extradition to the US, proposing civil penalties of up to $3.5 million.
The company’s Luna Classic (LUNC) token is currently trading at $0.0001076, showing an almost 8% increase in the 24-hour period.
Image source: Shutterstock, chart from TradingView.com