Terraform Labs and CEO Do Kwon Agree to $4.5 Billion Settlement with SEC

The settlement includes significant financial penalties and a ban on cryptocurrency transactions, aiming to provide restitution to defrauded investors.

A U.S. judge approved the $4.5 billion settlement, which includes $3.5 billion in disgorgement and $420 million in civil penalties.
Do Kwon, currently in custody, will personally pay $204 million and is banned from serving as an officer or director of a public company.
The collapse of Terraform’s TerraUSD and Luna tokens in 2022 resulted in $40 billion in investor losses.
Terraform Labs is required to dissolve and liquidate its remaining assets under Chapter 11 bankruptcy.
The SEC emphasized that the penalties serve as a strong deterrent against future fraudulent activities in the crypto industry.