The US Securities and Exchange Commission (SEC) reportedly wants to fine the disgraced founder of the Terra ecosystem multi-billion dollars.
According to a new report from Bloomberg, the regulator is seeking a $5.3 billion fine against Do Kwon for his role in the demise of the Terra ecosystem in 2022, alleging “shameful misconduct.”
Kwon and Terraform Labs were found liable for committing fraud at a trial earlier this month, paving the way for what could be the largest fine yet for the crypto industry. The report says Kwon and Terraform made nearly $4 billion by selling tokens as unregistered securities.
The penalty would consist of a $4.2 billion fine, $545 million in prejudgment interest, and $420 million and $100 million in civil penalties for the company and Kwon, respectively, the report said.
However, Kwon’s lawyers say that since the token sale took place outside the US, they could not possibly have violated federal laws.
Kwon was initially arrested by authorities in the Balkan country of Montenegro in 2023 after he was caught trying to board a flight to the United Arab Emirates (UAE) with a forged Costa Rican passport.
He is currently awaiting extradition to both the US and South Korea, where he is wanted by authorities for his role in the collapse of the $40 billion Terra ecosystem.
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