Terraform agreed with the SEC: It will pay a $4.47 billion fine

The U.S. Securities and Exchange Board (SEC) on Wednesday filed a “proposed final approval order” with U.S. District Court Judge Jed Rakoff for the Southern District of New York to approve the plan. According to the proposed decision, Terraform will pay $3.58 billion in repayment, $420 million in civil penalties and prevent Do Kwon from becoming a manager or officer of any public company.

Terraform Labs agreed to pay a $4.47 billion penalty after reaching a settlement with the US Securities and Exchange Board (SEC) over its algorithmic stablecoin that crashed dramatically in 2022.

The SEC filed its “latest proposed consent order” on Wednesday and asked U.S. District Court Judge Jed Rakoff for the Southern District of New York to approve the plan.

The SEC said in the court document:

“The proposed consent decree addresses the magnitude of this fraud, implements valuable remedial, punitive, and deterrent measures, includes a multibillion-dollar judgment, and provides meaningful and expeditious recovery for investor victims.

“If approved, the proposed resolution would send a clear deterrent message not only to those who engage in brazen behavior but also to all individuals who seek to establish new standards of conduct to evade the requirements of federal securities laws.”

Terraform and its founder Do Kwon reached an “agreement in principle” with the SEC after the verbal discussion at the end of May was canceled. According to the proposed decision, Terraform will pay $3.58 billion in repayment, $420 million in civil penalties and prevent Kwon from becoming a manager or officer of any public company.

The SEC said Kwon must also pay approximately $204 million “to the Terraform bankruptcy estate for distribution to injured investors.”

SEC to launch algorithmic stablecoin in February 2023 terra He filed a lawsuit against Terraform and Kwon over USD (UST). The agency said the company defrauded and misled investors. Just a few months ago, both sides were arguing over sentencing measures. Lawyers for Terraform and Kwon said the fines should be closer to $1 million, while the SEC recommended they pay $5.3 billion.

This news was first published on the Coin Engineer website.