Terraform Labs has recently come to a groundbreaking agreement with the United States Securities and Exchange Commission (SEC), agreeing to pay a total of around $4.47 billion to resolve ongoing civil legal matters. This settlement encompasses a restitution penalty of approximately $3.6 billion, a civil penalty of $420 million, and nearly $467 million in prejudgment interest.
Do Kwon, one of the co-founders of Terraform Labs, will bear a significant portion of this financial burden. As per the terms of the settlement, Kwon will be responsible for paying $110 million in restitution penalties and close to $14.3 million in prejudgment interest. The settlement was reached following a ruling that held Terraform Labs and Kwon accountable for the collapse of the Terra ecosystem, leading to a loss of $40 billion in investor funds.
According to the agreement, “Kwon’s monetary obligations will be deemed fulfilled once the total amount transferred by Kwon to the SEC and for Terraform’s bankruptcy estate in case of insolvency reaches a minimum of US$204,320,196.” This figure does not cover the value of any digital assets moved into Terraform’s bankruptcy estate, but completion of the payment is contingent on transferring US$4,700,000 to a designated escrow account within 30 days of the final court decision.
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