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.
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