Terraform Labs and Do Kwon reach agreement with SEC
Date: 2024-05-31 Author: Oliver Abernathy Categories: BLOCKCHAIN
Terraform Labs and its former CEO Do Kwon have reached a settlement with the US Securities and Exchange Commission (SEC). Lawyers for both sides and SEC officials notified the court of their agreement, marking an important step in resolving the lengthy lawsuit.
Details of the agreement and settlement process
According to court records, the parties announced they had reached an “agreement in principle” during a conference call on May 29, 2024. The Block reports that this conference was not transcribed or recorded, adding a degree of privacy to the process. The terms of the agreement were not disclosed, but it is known that the parties must file documents on the final settlement agreement by June 12, 2024. After this, the civil case against the company and its former CEO will be closed.
History of the trial
The legal proceedings against Terraform Labs and Do Kwon began with fraud allegations brought by the SEC. In early April 2024, the court found them guilty, which led to the SEC demanding a fine of $5.2 billion. However, the defendants tried to appeal this decision, arguing that the fraud was not committed in the United States, and offered to pay about $1 million. This argument was rejected by the SEC, complicating negotiations and the settlement process.
Impact on Terraform Labs business
Due to the indictment, Terraform Labs was forced to restrict access to some of its products to US customers. This decision demonstrates the serious implications of the lawsuit and the need to take action to comply with regulatory requirements. The company found itself in a difficult situation where further work in the American market became difficult.
Analysis of the current situation
The agreement with the SEC represents a significant development that may impact the future development of Terraform Labs. Situations like this remind us of the importance of complying with legal norms and regulations in high-tech industries such as blockchain and cryptocurrencies. Resolving disputes and reaching compromises with regulators can be key to stabilizing the business and restoring customer confidence.
The agreement reached between Terraform Labs, Do Kwon and the SEC marks an important step in resolving a conflict that has lasted several months. The preparation of final documents and the closure of the civil case will provide companies with the opportunity to focus on further development and adaptation to market demands. At the same time, this case serves as a reminder of the importance of regulatory compliance and the need for transparency in business.
