US Court Approves Settlement Agreement Between SEC and Terraform Labs for $4.5 Billion
Date: 2024-06-14 Author: Gabriel Deangelo Categories: IN WORLD
The New York State District Court, presided over by Judge Jed Rakoff, approved a settlement agreement between the US Securities and Exchange Commission (SEC) and Terraform Labs. Under the terms of the agreement, the company will pay a staggering $4.47 billion in fines to settle the case.
Agreement Details
As part of the settlement, Terraform Labs will pay $3.6 billion in damages, a $420 million fine and $467 million in interest. The company's former CEO, Do Kwon, is also a defendant in the SEC lawsuit and is ordered to repay more than $204 million, according to court filings. , the judge signed this agreement and it came into force. The first tranche from Do Kwon to the account selected by the Commission must arrive within 30 days.
Significance of the Fine
This fine is the largest in the US corporate environment. Previously, the largest fine was imposed on the Binance crypto exchange, which settled its case with the American authorities for $4.3 billion. It is noteworthy that in the case of Binance, the court approved the deal only three months after its announcement.
SEC Chairman Gary Gensler noted the significance of the case, saying, “This case confirms what has been repeated in the courtroom many times—that the economic realities of a product determine whether it is a security, not the label or advertising.”
Closing of Terraform Labs
After paying the fine, Terraform Labs will cease operations. The company's products will be sold and the remaining LUNA tokens will be destroyed. This was announced by the company's CEO, confirming that all operations will be completed in the near future.
This agreement sets a new precedent in the field of corporate regulation and control over cryptocurrency projects. It highlights the SEC's efforts to enforce laws and protect investors in the rapidly evolving crypto industry.
