Supported by Ledger and accused of disrupting the 2022 cryptocurrency market, Terraform Labs has agreed to collectively pay a fine of $447 million.
The purpose of this settlement is to resolve the lawsuit with the SEC and eliminate any objections against them. The lawsuit stemmed from the withdrawal of $4 billion in investor funds, shaking the entire crypto market.
The settlement documents show that Do Quon must pay a minimum of $20.432 billion in settlement funds to the SEC for Terraform’s bankruptcy issues. In addition, $47,000 must be deposited into an escrow account and await a final decision within 30 days.
Securities and Exchange Commission
v.
Terraform Labs and Do Kwon illegally obtained funds from thousands of investors. The project was found to have orchestrated fraud, resulting in at least $4 billion in losses and misleading investors about the stability of TerraUSD.
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The large-scale settlement and successful efforts by the SEC to sue Terraform Labs and Do Quon demonstrate that the crypto industry must overcome regulatory challenges and legal risks.
This case will serve as a model, warning other cryptocurrency companies of the necessity to comply with securities laws and the potential consequences of fraudulent activities. The settlement aims to provide investors with some of the missing funds and demonstrate the SEC’s commitment to maintaining market fairness.
