Kwon Do-hyung (Do Kwon), the CEO of Terraform Labs and a central figure in the collapse of the Terra and Luna cryptocurrencies, has agreed to pay around $4.47 billion in fines and disgorgements to the U.S. Securities and Exchange Commission (SEC).
According to Reuters and Bloomberg, the SEC and Kwon’s legal representatives reached this settlement regarding the fines, and they have requested court approval. The settlement amount is less than the initial $5.26 billion the SEC had sought.
In Nov. 2021, the SEC filed a civil lawsuit against Kwon and Terraform Labs, alleging that they misled investors about the stability of Terra, resulting in significant financial losses. This civil trial is separate from the criminal charges against Kwon. The trial proceeded without Kwon’s direct presence as he was not required to attend.
The jury found that Kwon and Terraform Labs had misled investors by claiming that Terra was safe, which led to substantial losses. Following the jury’s verdict, the SEC demanded $5.26 billion in fines and disgorgements. They argued that Kwon and Terraform Labs had made over $4 billion in illegal profits. Terraform Labs countered that the issuance and sale of the cryptocurrency mostly occurred outside the U.S., disputing the SEC’s jurisdiction to impose fines.
Kwon is also facing charges in South Korea and has been detained in Montenegro since Mar. 2023 for passport forgery. It is still undecided where Kwon will be extradited.
