The US Securities & Exchange Commission wants to impose a $5.3 billion fine on Terraform Labs Pte. and its co-founder Do Kwon, the inventor of the failed TerraUSD stablecoin.
Details of the proposed fine, which would be the crypto industry’s largest, come after Kwon and Terraform were found liable for fraud earlier in April following a two-week trial in New York.
Kwon and Terraform made more than $4 billion in “ill-gotten gains” from unregistered sales of tokens including LUNA and UST, the SEC said in its filing to the Southern District Court of New York. Terraform’s UST, an algorithmic stablecoin that was supposed to be pegged to the price of the US dollar, wiped out $40 billion in market value when it collapsed in 2022.
The court should send “an unequivocal message that this sort of brazen misconduct” will not be tolerated, the SEC said in the filing.
The proposed fine is comprised of a $4.2 billion disgorgement penalty and $545 million in prejudgment interest, as well as $420 million and $100 million civil penalties for Terraform and Kwon, respectively.
All told, the fine would surpass the $4.3 billion paid by Binance to settle anti-money laundering and US sanctions violations charges with the US Department of Justice in November 2023, itself one of the largest corporate agreements in US history.
Lawyers representing Kwon and Terraform challenged the SEC’s claims, arguing that token sales took place outside of the US and didn’t violate federal securities law.
Kwon was arrested in Montenegro a year ago and convicted of attempting to travel using a fake passport. He is currently awaiting extradition either to the US or his native South Korea and faces criminal fraud charges in both countries.
The SEC also asked the court for a permanent bar on Kwon, who owns 92% of Terraform, serving as an officer or director and seeks a “sworn accounting” of his assets.
Copyright Bloomberg News
Eliseo Prisno, a former Merrill advisor, allegedly collected unapproved fees from Filipino clients by secretly accessing their accounts at two separate brokerages.
The Harford, Connecticut-based RIA is expanding into a new market in the mid-Atlantic region while crossing another billion-dollar milestone.
The Wall Street giant's global wealth head says affluent clients are shifting away from America amid growing fallout from President Donald Trump's hardline politics.
Chief economists, advisors, and chief investment officers share their reactions to the June US employment report.
"This shouldn’t be hard to ban, but neither party will do it. So offensive to the people they serve," RIA titan Peter Mallouk said in a post that referenced Nancy Pelosi's reported stock gains.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
