Terraform settles with SEC for $4.5 billion, Do Kwon to personally pay $200 million

The U.S. Securities and Exchange Commission (SEC) on Wednesday submitted a "Final Consent Judgment Proposal" requesting Judge Jed Rakoff of the Southern District of New York to approve the plan. According to the proposal, Terraform will pay $3.58 billion in ill-gotten gains, $420 million in civil penalties, and prohibit Do Kwon from serving as an executive or director of any public company.

Terraform's Negotiation Fails, Settles in the End

Despite continuous requests from Terraform and Do Kwon's legal representatives to significantly reduce the total amount of fines, they ultimately agreed to a fine as high as $4.47 billion, which includes confiscation of proceeds, prejudgment interest, and civil penalties. The settlement agreement is still pending approval from New York Judge Jed Rakoff, who is responsible for this case.

Do Kwon, in particular, must personally pay at least $204,320,196 to be distributed to the affected investors. It is still unclear what criteria will be used to identify the affected investors.

Additionally, Terraform and Do Kwon will be permanently banned from trading any crypto asset securities.

Terraform and Do Kwon's Legal Negotiation, Arguing to Reduce $5.3 Billion Fine to $1 Million

SEC: Setting an Example to Deter Wrongdoers

According to a report by CoinDesk, the SEC stated in court documents:

If approved, the proposed judgment will not only send a clear message of deterrence to wrongdoers but also send a clear message to those attempting to establish new standards of behavior for crypto assets to evade federal securities laws. The multi-billion dollar judgment against the defendants provides meaningful and prompt compensation to the investment victims.

The trial of Terraform and Do Kwon took unexpected turns, including Do Kwon's initial escape, subsequent extradition between the U.S. and South Korea, and ultimately the SEC's success.

A spokesperson for Terraform Labs declined to comment. The company had previously stated that it is currently in a state of bankruptcy with assets of only about $150 million. In light of the excessive fines, how will Terraform repay?

SEC Seeks $5.3 Billion Penalty Against Terraform Labs and Do Kwon: No Remorse