Terraform Labs, led by Do Kwon, has reached a tentative agreement with the U.S. Securities and Exchange Commission (SEC) to settle fraud charges related to the collapsed LUNA cryptocurrency and TerraUSD (UST) stablecoin.
Do Kwon and Terraform Labs Settle SEC Fraud Charges Over LUNA and TerraUSD
Reuters was the first to report news of the tentative settlement. According to the court listing, all parties have notified the court of a preliminary agreement, with official filings due by June 12.
In April, a jury found Kwon and Terraform Labs guilty of civil fraud charges, holding them liable for deceiving investors about the coins. The settlement is expected to outline the amount Kwon and the firm have agreed to pay following the verdict, and it may also address Kwon's future role within Terraform.
In 2021, the SEC accused Kwon and the company of misleading investors about the stability of TerraUSD, a stablecoin intended to maintain a $1 value. Additionally, the regulator alleged they falsely claimed that Terraform's blockchain was used in a popular Korean mobile payment app. U.S. District Judge Jed Rakoff in Manhattan has instructed both the SEC and the defendants to submit papers supporting the settlement by June 12.
Note: This is a developing story, and more details will be provided as they become available.
