Story Highlights
- The SEC wants Terraform and Do Kwon to pay $5.3 billion in prejudgement interest and said they should pay $420 million and $100 million in penalties.
- Lawyers are opposing the SEC, saying that figure should be close to $1 million.
Lawyers for Terraform Labs and Do Kwon say a fine close to $1 million is appropriate after finding fraud and them being guilty for a fraud of $5.3 billion as proposed by the U.S. Securities and Exchange Commission. Their say comes a week after the SEC said Terraform and Do Kwon are liable to pay around $4.7 billion in prejudgement interest, and they also say that Terraform and Do Kwon should pay an additional $420 million and $100 million in civil penalties.
On the other hand, Terraform and Do Kwon’s lawyers say that the figure should be much lower and that it should be settled at $1 million, as they said in the court filing that took place last week.
The lawyers said that the court should not grant any relief to prejudgement and should impose an amount close to $1 million in the case of the civil penalty. The SEC charged Terraform and Do Kwon in 2023 over the issue of algorithmic stablecoin Terra USD, which fell drastically a year earlier.
If we talk about algorithmic stablecoins like USD, they use market incentives through algorithms in order to maintain a price that seems stable to the market. Terra is linked to Luna, which is a government token, and Luna is used to keep prices stable. Algorithmic stablecoin Terra USD collapsed in 2022, as a result of which more than $50 million was wiped out of the market.
Earlier this year, in 2024, in the same month of April, a jury was set to find out that Terraform and Do Kwon are both responsible for misleading investors and have been found guilty in cases of civil fraud. The main issue that the jury had to deal with was the claims of the SEC that both Terraform and Do Kwon were definitely violating the laws of federal securities. They are doing so by engaging in fraud related to the buying and selling of securities. It is claimed that Terraform and Do Kwon offered unregistered securities, and this judgment was granted by Jed Rakoff.
When the verdict was finally released in public, a spokesperson from Terraform claimed that their actions and further steps were carefully weighted.
Lawyers for Terraform Labs and Do Kwon say a fine close to $1 million is appropriate after finding fraud and them being guilty for a fraud of $5.3 billion as proposed by the U.S. Securities and Exchange Commission.
Their say comes a week after the SEC said Terraform and Do Kwon are liable to pay around $4.7 billion in prejudgement interest, and they also say that Terraform and Do Kwon should pay an additional $420 million and $100 million in civil penalties.
On the other hand, Terraform and Do Kwon’s lawyers say that the figure should be much lower and that it should be settled at an amount of $1 million, as they said in the court filing that took place last week.
The lawyers said that the court should not grant any relief to prejudgement and should impose an amount close to $1 million in the case of the civil penalty. The SEC charged Terraform and Do Kwon in 2023 over the issue of algorithmic stablecoin Terra USD, which fell drastically a year earlier.
Earlier this year, in 2024, in the same month of April, a jury was set to find out that Terraform and Do Kwon are both responsible for misleading investors and have been found guilty in cases of civil fraud. The main issue that the jury had to deal with was the claims of the SEC that both Terraform and Do Kwon were definitely violating the laws of federal securities. They are doing so by engaging in fraud related to the buying and selling of securities. It is claimed that Terraform and Do Kwon offered unregistered securities, and this judgment was granted by Jed Rakoff.
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