Cryptocurrency markets were devastated by the 2022 crash, with Terra playing a significant role. It was the first and largest domino to fall, triggering the collapse. While everyone anticipated a boom in crypto lending, Terra caused a major disruption. Now, they face a $4.5 billion fine.
Terra (LUNA) Latest News
Do Kwon, who fled Montenegro, has seen multiple court orders for his extradition. However, all decisions were overturned by another court. Before Do Kwon is extradited to the US or South Korea, Terra‘s fine has been determined. Terraform will pay a $4.5 billion penalty for the collapse of the $40 billion ecosystem. This money largely comes from gains made from victims.
SEC Chairman mentioned the following in a recently released SEC announcement;
“This case confirms what courts have repeatedly stated: The economic realities of a product, not labels, speculations, or exaggerations, determine whether it is a security under securities laws. Terraform and Do Kwon’s fraudulent activities caused devastating losses for investors, wiping out entire life savings in some cases. Their fraud reminds us that investors suffer when firms do not comply with the law. Terraform and Kwon fought our investigative efforts, taking the battle over subpoenas to the Supreme Court. Fortunately, with this settlement, the victims of this massive fraud will now see justice. Do Kwon and Terra orchestrated one of the largest securities frauds in US history, falsely claiming to have achieved the ‘Holy Grail’ of crypto (a legal use case). As the jury found, their claims of creating an ‘algorithmic stablecoin’ were also lies. Ultimately, they only succeeded in deceiving investors, destroying tens of billions in market value, and creating numerous victims. Today’s multi-billion dollar settlement not only holds them accountable and prioritizes the return of hundreds of millions to harmed investors but also demonstrates that despite the vast resources crypto asset defendants use against us, the Enforcement Division’s dedicated staff will not stop until justice is served for the victims of these breathtaking frauds.”
In exchange for the settlement, Terra will pay;
- $3.586 billion in restitution
- $466 million in prejudgment interest
- $420 million in civil penalty
Do Kwon will personally pay $110 million in restitution, $14.3 million in prejudgment interest, and $80 million in civil penalties.
