Do Kwon and Terraform Labs reach an agreement for fraud with the US SEC – DiarioBitcoin
By Hannah Perez
Two years after Terra’s collapse, U.S. regulators and its founder reached an agreement in principle to resolve fraud charges. The SEC previously said it would seek a fine of more than $5 billion.
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- US SEC would have agreed in principle with Do Kwon and Terraform Labs
- Both were charged with civil fraud for their role in the collapse of Terra in May 2022
- Regulators apparently sought to impose a fine of more than $5 billion
Two years have passed since the ecosystem of Terra collapsed resoundingly, leaving investors with a gap of more than USD $40 billion. Now, the case could be about to reach a legal resolution in the United States.
Do Kwon and Terraform Labscreators of cryptocurrency Terrahave reached an agreement in principle with the U.S. Securities and Exchange Commission (SEC) over fraud charges against them, several news outlets reported Thursday, citing a court filing.
The parties would have reached an agreement in principle in a telephone conference in which the lawyers of each side were present, according to reports CoinDesk. Since the parties informed the court that they had reached a tentative agreement, a hearing set for May 29 was canceled, the coverage added.
The parties must file the required documents in support of the agreement with the judge by June 12, according to reports.
The development comes just over a year after the US SEC filed charges against Kwon, founder and former CEO of Terraform Labs, and the company in question. The SEC had alleged that Terraform and its founder misled investors about the stability of its so-called native stablecoin.”algorithmic“, Terra USD (UST), and blockchain use cases Terra.
In May 2022, UST lost the expected peg to the US dollar in a domino effect caused by the crash of its sister token LUNA, causing the entire ecosystem to implode.
A trial of both defendants, which took place in a New York court and lasted two weeks, concluded earlier this month by finding the defendants guilty of civil fraud charges. The SEC said after that it was seeking to impose a $5.3 billion fine on Kwon and Terraform Labs.
Kwon, a South Korean national, is free on bail in Montenegro, where he awaits an extradition order to the United States or South Korea, where he also faces criminal charges.
Article by Hannah Estefanía Pérez / DailyBitcoin
Picture of Unsplash
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