SEC Seeks $5.3B Judgment Against Terraform Labs and Do Kwon
Jessie A Ellis Apr 23, 2024 14:43
The US Securities and Exchange Commission (SEC) has filed a motion for billions of dollars in disgorgement and civil penalties against Terraform Labs and co-founder Do Kwon. The SEC is seeking $4.7 billion in disgorgement and prejudgment interest, along with $520 million in civil penalties. Terraform and Kwon have proposed lower penalties, and the SEC is also considering additional measures to prevent future violations.
The United States Securities and Exchange Commission (SEC) has initiated legal proceedings against Terraform Labs and its co-founder, Do Kwon, by submitting a demand for the company to pay civil fines and disgorgement in the amount of billions of dollars. The SEC has filed a petition in response to a judgement in a civil matter, and the purpose of the move is to hold Terraform Labs and Kwon responsible for the alleged violations they have committed.
Disgorgement and Civil Penalties: The Securities and Exchange Commission (SEC) has demanded that Terraform Labs and Kwon pay roughly $4.7 billion in disgorgement and prejudgment interest. Disgorgement is the process of repaying earnings that were obtained by dishonest means, while prejudgment interest is a kind of compensation for the time worth of money. Moreover, the Securities and Exchange Commission is requesting a total of $520 million in civil penalties, with Terraform Labs being responsible for $420 million and Kwon being responsible for $100 million.
possible Solutions: Terraform Labs and Kwon have both submitted their briefs in the civil case, in which they propose several possible solutions to the problem. In their proposal, Terraform Labs suggested a maximum civil penalty of $3.5 million, whereas Kwon suggested a penalty of $800,000. The SEC's proposed sums are much higher than these estimates, which are substantially lower.
The Securities and Exchange Commission (SEC) is contemplating the imposition of further measures to deter future breaches, in addition to the disgorgement and civil penalties that have already been imposed. The Securities and Exchange Commission has requested that Kwon be prohibited from acting as an officer or director of a securities company. In addition, the Securities and Exchange Commission is attempting to get a "conduct-based injunction" in order to guarantee that Terraform Labs and Kwon would not commit breaches of a similar kind in the future.
The importance of SEC enforcement is shown by the fact that the SEC has filed a request for disgorgement and civil penalties against Terraform Labs and Do Kwon. This action demonstrates the regulatory agency's dedication to safeguarding investors and prosecuting those who violate securities laws. By ensuring that both people and businesses are held responsible for their activities, the Securities and Exchange Commission (SEC) strives to preserve the integrity of the financial markets and to encourage fair practices.
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