The US government wants crypto company Terraform Labs and co-founder Do Kwon to pay a $5.3 billion fine for fraud. The Block reports this based on court documents. She considers it proven that both parties are liable for a billion-dollar fraud.
SEC demands $5.3 billion
The US Securities and Exchange Commission (SEC) wants Kwon and Terraform to pay approximately $4.7 billion in illicit profits for their role in Terra-Luna’s collapse in 2022, according to an April 19 court document. The SEC is also asking the court to order Terraform and Kwon to pay $420 million and $100 million, respectively, in civil penalties.
“The Court must send an unequivocal message that this type of egregious misconduct. And the Defenders’ misguided attempts to excuse their behavior by formulating new rules and standards of conduct for crypto markets in violation of federal securities laws […] is not tolerable,” the SEC said in a filing.
Kwon and his company have been found liable for misleading customers about the safety of investing in their algorithmic stablecoin Terra USD (UST) and the underlying usability of the blockchain. This is evident from the verdict of a jury in a civil court in New York. Crypto investors bought more than $2 billion in UST from exchanges and other trading platforms, court documents show.
The SEC calls the proposed fines “conservative” but “reasonable,” especially considering the enormous wealth Kwon amassed from Terraform’s fallen stablecoin. The company and its founder believe the fines are far too high. According to Terraform Labs, a maximum fine of $3.5 million is more appropriate and Kwon can “only” pay $800,000.
Source: https://bitcoinmagazine.nl/nieuws/sec-eist-miljardenboete-van-do-kwon-en-terraform-labs
