A new report says the US Securities and Exchange Commission (SEC) has reached a multi-billion dollar settlement with the crypto company that played a major role in sparking the FTX implosion.
According to Reuters, the SEC has reached a $4.47 billion settlement with Terraform Labs after the stablecoin company was found liable for defrauding investors of $40 billion in the 2022 collapse of TerraUSD and Luna.
According to the report, the proposed final judgment on the trial was filed Wednesday but is still awaiting approval by U.S. District Judge Jed Rakoff. The $4.47 billion settlement includes $4.05 billion in disgorgement plus interest, in addition to a $420 million civil penalty, plus an $80 million fine for the company’s disgraced founder, Do Kwon.
According to the report, Terraform filed for bankruptcy in January.
In April, a federal court jury found Kwon and Terraform Labs liable on the fraud charges brought by the SEC.
The SEC said in a court filing about the settlement:
“Entering this judgment would ensure maximum recovery of funds to injured investors and put Terraform out of business forever.
This proposed judgment is therefore fair, reasonable and in the public interest.”
Terraform Labs founder Do Kwon is currently waiting in Montenegro. Last month, he reportedly reached a tentative settlement with the SEC.
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Featured image: Shutterstock/Tithi Luadthong