Terraform Labs and its Founder, Do Kwon, have reached a settlement with the US Securities and Exchange Commission (SEC) following allegations of fraud surrounding the collapse of the stablecoin TerraUSD, Reuters reported. The agreement, disclosed on a court website, arrived after a jury found Kwon and Terraform Labs liable for civil fraud charges in April.
Criminal Charges Still Pending
The SEC had accused the company and Kwon of misleading investors in 2021 about the stability of TerraUSD, a stablecoin designed to maintain its value to $1. Additionally, they were accused of falsely claiming that Terraform's blockchain was utilized in a popular Korean mobile payment app.
The settlement, though its terms remain undisclosed, marks a significant development in the ongoing legal saga between Terraform Labs, Do Kwon, and the SEC. US District Judge Jed Rakoff in Manhattan has requested supporting documents from both parties by June 12.
Initially, the SEC sought substantial penalties, including relinquishing $5.3 billion in alleged ill-gotten gains fromstablecoin sales, fines totaling hundreds of millions of dollars, and a ban on dealing in crypto asset securities for both Kwon and Terraform Labs.
The collapse of TerraUSD and Luna, a token closely tied to TerraUSD, affected the cryptocurrency markets in May 2022, resulting in an estimated loss of over $40 billion for investors. Despite the settlement, Kwon still faces related criminal charges in both the US and South Korea, though he maintains his innocence.
Kwon's extradition saga recently took a new turn after Montenegro's Court of Appeal referred the case back to the High Court for retrial. This action followed arguments from Kwon's lawyers that questioned the validity of the initial ruling.
Kwon's Extradition Remains Uncertain
The decision to extradite Kwon was returned to the High Court in Montenegro after the Court of Appeal granted an appeal by his legal team. The Court of Appeal accepted the arguments presented by Kwon's lawyers, canceling the previous decision by the High Court and mandating a retrial.
The initial ruling from the High Court in Podgorica, dated April 8, 2024, allowed for Kwon's extradition but was criticized for lacking decisive facts and valid reasons. The High Court must now ensure that Kwon's consent to extradition is voluntary, informed, and irrevocable.
The US has requested Kwon's extradition, filing eight charges against him and expressing a willingness to prosecute him in absentia. Kwon disappeared from the public eye following the catastrophic collapse of TerraUSD and Lunacryptocurrencies in 2022, which wiped out nearly $37 billion from the crypto market and led to several bankruptcies. He was later arrested in Montenegro.
This article was written by Jared Kirui at www.financemagnates.com.
You can get bonuses upto $100 FREE BONUS when you:
💰 Install these recommended apps:
💲 SocialGood - 100% Crypto Back on Everyday Shopping
💲 xPortal - The DeFi For The Next Billion
💲 CryptoTab Browser - Lightweight, fast, and ready to mine!
💰 Register on these recommended exchanges:
🟡 Binance🟡 Bitfinex🟡 Bitmart🟡 Bittrex🟡 Bitget
🟡 CoinEx🟡 Crypto.com🟡 Gate.io🟡 Huobi🟡 Kucoin.
Comments