SEC & Do Kwon Reach $4.5 Billion Settlement: A Crypto Trading Ban and Big Penalties

A U.S. District Court judge has approved a settlement between the SEC, Terraform Labs, and its former CEO, Do Kwon, involving $4.5 billion in penalties and a ban on trading crypto asset securities. The settlement, approved by Judge Jed Rakoff of the Southern District of New York (SDNY), includes $4.5 billion in disgorgement and civil penalties for Terraform Labs and Kwon, permanently banning them from buying and selling crypto asset securities, including Terra ecosystem tokens. It remains unclear if this ban extends to other cryptocurrencies. This settlement represents a compromise between the SEC's initial offer of $5.3 billion and Terraform's initial proposal of $1 million. Do Kwon, currently in custody in Montenegro awaiting extradition, was absent from the trial where the settlement was reached. Terraform Labs, currently under Chapter 11 bankruptcy protection with approximately $150 million in assets, was represented by CEO Chris Amani at the trial.