The U.S. Securities and Exchange Commission (SEC) has asked the court to order Terraform Labs and Do Kwon to pay around $5.3 billion as part of the final judgment against the two defendants. This sum includes $4,192,147,847 in disgorgement and $545,748,909 in prejudgment interest.
SEC Seeks Final Judgment Against Terraform Labs and Do Kwon
The U.S. Securities and Exchange Commission (SEC) filed a motion on Friday seeking final judgment against defendants Terraform Labs and co-founder Do Hyeong Kwon, aka Do Kwon.
The SEC clarified that on April 5, the jury had delivered a verdict against the defendants, finding them guilty on all counts. The securities regulator emphasized that the court should enjoin the defendants from further violations of securities laws, adding that the court should:
Jointly and severally order them to pay disgorgement of $4,192,147,847 plus $545,748,909 in prejudgment interest.
Moreover, the SEC sought the court’s imposition of a $420 million civil penalty on Terraform and a $100 million civil penalty on Kwon. In total, the SEC is seeking close to $5.3 billion from the two. The agency also requested a “conduct-based injunction” against the defendants, a “sworn accounting from Kwon,” and an “officer-and-director bar.” Lastly, the SEC urged the court to classify the fraud-related monetary remedies imposed on Terraform as non-dischargeable in bankruptcy and to issue a final judgment.
In April, Terraform Labs released a statement on social media platform X following the verdict announcement. “We are deeply disappointed with the verdict, as we believe it lacks sufficient evidence. We firmly assert that the SEC lacks the legal authority to pursue this case, and we are currently evaluating our options and determining our next course of action,” the company wrote. At press time, Terraform Labs had not provided any statements regarding the SEC’s $5.3 billion penalty request.
Kwon was arrested and detained in Montenegro in June of last year after being apprehended while attempting to depart using a counterfeit passport. U.S. prosecutors charged him with eight criminal offenses, including securities, commodities, and wire fraud. South Korea issued an arrest warrant for him in September 2022, accusing him of breaching capital market regulations in the country. He is currently in an extradition dispute between the U.S. and South Korea.
