Terraform Labs attorney and co-founder Dokwon Kwon said a fine closer to $1 million would be more appropriate than the $5.3 billion proposed by the Securities and Exchange Commission after the company was found guilty of fraud.
Their request comes a week after the SEC said Kwon and Terraform should. Pay It said it would have to pay about $4.7 billion in conversion and prejudgment interest, and that Terraform and Kwon would have to pay $420 million and $100 million, respectively, in civil penalties.
Lawyers for Kwon and Terraform said that figure should be much lower. court filing Posted late last week.
“In conclusion, the court should not grant injunctive relief or clawbacks and should impose a civil penalty of up to $1 million against TFL,” the attorneys said.
SEC charged Terraform and Kwon collapsed in dramatic fashion a year ago in February 2023 over algorithmic stablecoin Terra USD (UST).
Algorithmic stablecoins use market incentives through algorithms to maintain stable prices. Terra has been linked to Luna, a governance token, to keep the price stable. UST collapsed in May 2022, causing losses of more than $50 billion.
Earlier this month, a jury Both Terraform and Kwon were found liable for misleading investors and civil fraud. The main issue the jury had to examine centered around the SEC’s allegations that Kwon and Terraform violated federal securities laws by engaging in fraud related to the purchase and sale of Terraform securities. Judge Jed Rakoff previously granted summary judgment to the SEC on claims that Terraform and Kwon had offered and sold. unregistered securities.
At the time of the ruling, a Terraform spokesperson said: “We are carefully considering our options and next steps.”
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About the author
Sarah is a reporter for The Block covering policy, regulation and legal events. She was previously a reporter writing about securities regulation at CQ Legal, where she first began her reporting on cryptocurrencies. She Sarah has also written for The Bond Buyer and American Banker, among other financial publications. She graduated from the University of Missouri with a degree in Print and Digital Journalism. Sarah lives in Washington, DC and she is an avid coffee lover. You can follow her on Twitter @ForTheWynn.