The Securities and Exchange Commission (SEC) is reportedly seeking a staggering $5.3 billion fine against Do Kwon, the founder of the collapsed Terra ecosystem.
Allegations of Misconduct
The SEC alleges that Kwon and his company, Terraform Labs, engaged in “brazen misconduct” that led to the downfall of the Terra ecosystem in 2022. They are accused of committing fraud by selling unregistered securities.
Potential Record-Breaking Fine
If imposed, the fine would be the largest ever in the cryptocurrency industry. It would include a $4.2 billion disgorgement penalty, $545 million in prejudgment interest, and $420 million and $100 million in civil penalties for Terraform Labs and Kwon, respectively.
Kwon’s Defense
Kwon’s defense attorneys argue that the token sales occurred outside the US and therefore did not violate federal laws.
Arrest and Extradition
Kwon was arrested in Montenegro in 2023 and is currently awaiting extradition to both the US and South Korea. He is wanted in connection with the $40 billion collapse of the Terra ecosystem.
