Terraform Labs Settles SEC Dispute with $4.47 Billion Payment

Terraform Labs Pte. Ltd. has agreed to pay $4.47 billion to settle a civil lawsuit filed by the US Securities and Exchange Commission (SEC) following its 2022 collapse. This collapse resulted in a loss of $40 billion in investor assets and had significant repercussions in the cryptocurrency market. The SEC has requested a federal judge in New York to approve the settlement, which was reached after a jury found Terraform Labs and co-founder Do Kwon liable for the collapse after a two-week trial.

The settlement includes approximately $3.6 billion in disgorgement fines, a civil penalty of $420 million, and nearly $467 million in prejudgment interest. Additionally, Kwon is required to pay $200 million to the Terraform bankruptcy estate. The SEC argues that these penalties are within statutory limits and aim to deter future fraudulent schemes. This agreement, pending court approval, would bring an end to the legal battle between Terraform Labs and the SEC, marking a significant resolution in one of the largest securities fraud cases in US history.