SEC Accuses Terraform Labs of Creating $166M 'Slush Fund' with Law Firm Dentons

The U.S. Securities and Exchange Commission alleges that Terraform Labs misappropriated funds to avoid future judgments, impacting investors and creditors.

The SEC objects to Terraform Labs' $166 million retainer payment to Dentons, claiming it was used to create an opaque slush fund.
Terraform Labs is accused of transferring $122 million to Dentons within 90 days before filing for Chapter 11 bankruptcy.
The SEC argues that the funds could have been used to repay investors and creditors in Terraform's bankruptcy case.
Terraform Labs and its founder, Do Kwon, face a trial in the U.S. regarding the collapse of TerraUSD.
The SEC has requested the court to deny Terraform Labs' retention of Dentons and to appoint a fee examiner on the retainer payment.