Terraform Labs’ defense requests $1M in civil penalty with new motion

The Securities and Exchange Commission wanted Terraform Labs and Do Kwon, the platform’s co-founder, to pay $5.3 billion in civil penalties for deceiving investors.

• $4.7B disgorgement charges
• $420M civil penalties (Do Kwon)
• $100M civil penalties (Terraform)

The jury found the crypto company and co-founder guilty of misleading customers on April 5.

JUST IN: #TerraformLabs and Co-Founder Do Kwon found guilty of fraud in #SEC Case. pic.twitter.com/0oDUucWSZC

— cryptothedoggy (@cryptothedoggy) April 6, 2024

Meanwhile, Terraform’s defense team believes a $1 million is a more appropriate penalty, compared to the SEC’s proposed billion-dollar fine.

#Terraform lawyers argue that Do Kwon should only pay close to 0.019% of the proposed fines by the #SEC.

The SEC wants $5.3bn, but Do Kwon’s lawyers say he should only pay $1m.

— Telo News (@Telo_Official) April 30, 2024

Do Kwon (in another filing ) stated that disclosing his assets and financial accounts would trespass his self-incrimination rights.

SEC charges against Terraform & Kwon

The securities regulator sued Terraform Labs and co-founder Kwon in early 2023 after a scandal related to the company’s stablecoin Terra USD.

SEC sues Terraform Labs and its co-founder Do Kwon

The U.S. Securities and Exchange Commission (SEC) on Thursday indicted Terraform Labs, the company behind the failed TerraUSD stablecoin, and its co-founder Do Kwon.#LUNA pic.twitter.com/6prVTBlW6e

— Qin (@Qin_yaoyao) February 17, 2023

Terra USD (UST) attracted the SEC’s attention in May 2022 after a relentless plunge that saw it lose around $50 billion of its value.

In April 2024, a jury found Kwon and the cryptocurrency firm committed civil fraud by deceiving investors.

The latest moves comes after Terraform Labs suspended operations to United States users last week, citing regulatory challenges.

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