{"id":33050,"title":"Terraform Labs pays $4.5 billion in SEC fraud case","publisher":"Stockmark.IT","author":"Stockmark.IT Website","published":"2024-06-13T06:05:22+00:00","modified":"2024-06-13T06:05:22+00:00","canonical_url":"https://stockmark.it/terraform-labs-pays-4-5-billion-in-sec-fraud-case/","markdown_url":"https://stockmark.it/terraform-labs-pays-4-5-billion-in-sec-fraud-case.md","json_url":"https://stockmark.it/terraform-labs-pays-4-5-billion-in-sec-fraud-case.json","category":"Crypto Currency","categories":["Crypto Currency"],"featured_image":"https://i0.wp.com/stockmark.it/wp-content/uploads/2022/11/bitcoin-sm.jpg?fit=480%2C270&quality=89&ssl=1","format":"news","language":"en-GB","content":"Terraform Labs has agreed to pay the US Securities and Exchange Commission $4.47bn to settle a case that was brought by them. This makes it the latest cryptocurrency company in the US to be hit with a large penalty.\n\nA New York jury found the collapsed stablecoin company and its CEO, Do Kwon liable in April, in a civil suit brought by SEC. The SEC accused them of orchestrating a cryptocurrency scam that resulted in billions of dollar losses.\n\nTerraform, according to documents filed on Wednesday in Manhattan Federal Court, has agreed to pay $4.47bn as monetary penalties and to refrain from “engaging [in] crypto asset securities transaction”.\n\nThe SEC stated in a court-filed letter that the entry of the judgment would guarantee the maximum return of funds for harmed investors, and Terraform’s business will be permanently ended.\n\nKwon is required to pay a total of $204mn as part of an agreement that the SEC has proposed to the court. Kwon is also prohibited from holding any position of officer or director in a public company.\n\nThe SEC stated in its letter that if approved, “the proposed judgment will send a unmistakable message of deterrence to those who engage brazenly in misconduct as well as to those who are seeking to evade federal securities laws through the creation of new standards of behavior for crypto assets which fall under federal securities laws.”\n\nTerraform will be required to seek approval of a liquidation in its separate Chapter 11 case in Delaware. Kwon also must transfer at least $200mn to the bankruptcy estate of the company to repay investors.\n\nTerraform declined to make any comments beyond the court documents. Terraform refused to comment. Kwon’s lawyer did not respond immediately to a comment request.\n\nAccording to the SEC complaint, Terraform and Kwon, a Singapore-based company, raised billions from investors between April 2018 and May 20, 2022 by selling interconnected digital securities. Many of these securities were not registered properly with regulators.\n\nIt was TerraUSD that Kwon created. The crash of TerraUSD in 2022 and the associated token luna sent shockwaves throughout the crypto sectorr.\n\nKwon, who is wanted in the US and South Korea on separate criminal charges for his arrest, remains in Montenegro as a result of a legal battle over his extradition.\n\nKwon’s business and Kwon himself are two of the former high-flying cryptocurrency companies and executives that US authorities are targeting, claiming to be protecting investors.\n\nSam Bankman Fried, the founder of crypto exchange FTX was sentenced earlier this year to 25 years of prison after a New York jury convicted him of fraud. Binance’s founder Changpeng Zhao received a four-month prison sentence and was fined $4.3bn for failing to stop money laundering and funding terrorist organizations."}