BTC

$65407.923

-0.76%

ETH

$2950.189

-1.79%

BNB

$569.536

-2.24%

XRP

$0.517

0.09%

News

$5.3 Billion Terraform Labs Fraud Fine Opposed by The Firm For Being Too Heavy

May 2, 2024 - Around 2 mins mins to read

Key Points:

  • Terraform Labs fraud fine is being opposed by the firm for the amount of $5.3 billion, arguing most sales were overseas.
  • May 22 hearing to address verdict consequences; SEC seeks billions, and Terraform suggests a $1 million penalty.
  • Dispute over fine severity persists despite fraud ruling; legal arguments focus on US impact and post-verdict remedies.
According to Bloomberg, Terraform Labs Pte. and its co-founder Do Kwon, recently held liable for fraud by a New York jury, are contesting the $5.3 billion fine imposed by US regulators.
$5.3 Billion Terraform Labs Fraud Fine Opposed by The Firm For Being Too Heavy

$5.3 Billion Terraform Labs Fraud Fine Countered By The Firm

They argue that the majority of their stablecoins were sold overseas and thus shouldn’t be subject to such a hefty penalty.

The upcoming May 22 hearing is anticipated to address the aftermath of the verdict. The US Securities and Exchange Commission (SEC) alleged that Terraform‘s collapse in 2022, driven by the failure of its TerraUSD stablecoin, resulted in the loss of $40 billion in investor assets, prompting a lawsuit against the firm and Kwon in February 2023.

Court documents reveal the SEC’s pursuit of Terraform Labs fraud fine and prejudgment interest amounting to $4.7 billion, plus $520 million in civil penalties. Terraform, however, proposes a nominal $1 million civil penalty without disgorgement.

Legal Battle Escalates Over Terraform’s Overseas Sales

Terraform’s legal team contends that the firm’s token sales primarily occurred outside the US, challenging the SEC’s assertion that their activities directly caused the claimed losses. Despite being found guilty of fraud on April 5, Terraform and Kwon dispute the severity of the Terraform Labs fraud fine, which would mark a historic penalty in the crypto industry.

Meanwhile, Kwon’s lawyers argue that the SEC failed to demonstrate the foreseeable impact of his work in the US. Judge Jed Rakoff has scheduled a court appearance on May 22 to discuss potential remedies post-verdict, allowing for adjustments to previous penalty motions.

The jury’s decision in April confirmed Terraform and Kwon’s liability for civil fraud, centered on allegations of violating federal securities laws. Judge Rakoff previously ruled in favor of the SEC’s claim regarding the offering and sale of unregistered securities by Terraform and Kwon.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

do kwon

Judge Jed Rakoff

SEC

Terraform

Terraform Labs

TerraUSD

UST

Avatar of Harold

Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.
News

$5.3 Billion Terraform Labs Fraud Fine Opposed by The Firm For Being Too Heavy

Key Points:

  • Terraform Labs fraud fine is being opposed by the firm for the amount of $5.3 billion, arguing most sales were overseas.
  • May 22 hearing to address verdict consequences; SEC seeks billions, and Terraform suggests a $1 million penalty.
  • Dispute over fine severity persists despite fraud ruling; legal arguments focus on US impact and post-verdict remedies.
According to Bloomberg, Terraform Labs Pte. and its co-founder Do Kwon, recently held liable for fraud by a New York jury, are contesting the $5.3 billion fine imposed by US regulators.
$5.3 Billion Terraform Labs Fraud Fine Opposed by The Firm For Being Too Heavy

$5.3 Billion Terraform Labs Fraud Fine Countered By The Firm

They argue that the majority of their stablecoins were sold overseas and thus shouldn’t be subject to such a hefty penalty.

The upcoming May 22 hearing is anticipated to address the aftermath of the verdict. The US Securities and Exchange Commission (SEC) alleged that Terraform‘s collapse in 2022, driven by the failure of its TerraUSD stablecoin, resulted in the loss of $40 billion in investor assets, prompting a lawsuit against the firm and Kwon in February 2023.

Court documents reveal the SEC’s pursuit of Terraform Labs fraud fine and prejudgment interest amounting to $4.7 billion, plus $520 million in civil penalties. Terraform, however, proposes a nominal $1 million civil penalty without disgorgement.

Legal Battle Escalates Over Terraform’s Overseas Sales

Terraform’s legal team contends that the firm’s token sales primarily occurred outside the US, challenging the SEC’s assertion that their activities directly caused the claimed losses. Despite being found guilty of fraud on April 5, Terraform and Kwon dispute the severity of the Terraform Labs fraud fine, which would mark a historic penalty in the crypto industry.

Meanwhile, Kwon’s lawyers argue that the SEC failed to demonstrate the foreseeable impact of his work in the US. Judge Jed Rakoff has scheduled a court appearance on May 22 to discuss potential remedies post-verdict, allowing for adjustments to previous penalty motions.

The jury’s decision in April confirmed Terraform and Kwon’s liability for civil fraud, centered on allegations of violating federal securities laws. Judge Rakoff previously ruled in favor of the SEC’s claim regarding the offering and sale of unregistered securities by Terraform and Kwon.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Visited 103 times, 1 visit(s) today