[NEWS] TerraForm Labs agrees to pay approximately 7 billion yen to settle with the SEC

It has been revealed that Terraform Labs, the developer of the algorithmic stablecoin TerraUSD (UST), whose price collapsed in May 2022, has agreed to pay approximately $4.47 billion (approximately 703 billion yen) to the SEC (US Securities and Exchange Commission).

This was revealed in settlement documents submitted to the court by the SEC (US Securities and Exchange Commission) on the 12th.

Terraform Labs and former CEO Do Kwon were convicted of civil fraud in May of this year for causing investors to lose $40 billion (approximately 6.3 trillion yen) due to the price collapse of TerraUSD and Luna (formerly LUNA).

A Manhattan jury found that Terraform Labs and Kwon committed fraud by misleading investors about the success and stability of the project before the collapse of the Terra Blockchain.

As part of the agreement, TerraForm Labs and Cuong will return $4.5 billion in ill-gotten gains and pay a civil penalty of $420 million. Cuong will also be barred from any future cryptocurrency transactions.

According to the agreement, Cuong will also personally pay a total penalty of $204 million to support victims, which the SEC said will be an "undeniable deterrent."

Cuong, who is currently being held in Montenegro, has yet to be determined whether he will be detained in the United States or South Korea.

The TerraLuna Incident: The Start of the "Crypto Winter"

The collapse of the prices of TerraUSD and Luna in 2022 has thrown the cryptocurrency market into turmoil, which is said to have led to the subsequent "crypto winter." In November of the same year, major cryptocurrency exchange FTX also collapsed. It can also be said that this incident impressed upon regulators around the world the need for cryptocurrency regulation.

After being indicted, Khuon fled Singapore, where he had been staying, but was arrested in Montenegro at the end of last year. He was charged with fraud by the US Department of Justice in connection with Terra's collapse. He also faces separate charges in South Korea for financial crimes including capital market law violations, fraud, bribery, and trading volume manipulation.

Reference: Court documents
Image: Shutterstock

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