Terra and its Founder Settle with SEC: Tokens are Rising!

Terra and its founder reached a settlement with the SEC regarding fraud!
Terra and its Founder Settle with SEC_Tokens are Rising

The cryptocurrency market is moving at a rapid pace this year. We started the new year with the approval of spot Bitcoin ETFs by the U.S. SEC. Then, in a surprise decision, the SEC also gave the green light to spot Ethereum ETFs. Thus, the cryptocurrency world has begun to overcome the obstacles in its path. One of these obstacles was the dramatic collapse of the Terra ecosystem that deeply affected the market in previous years.

Terra and its founder reached a settlement with the SEC regarding fraud!

In a hot development, Reuters announced that the SEC reached a settlement with Terra and its founder, Do Kwon, regarding fraud. Following this development, ecosystem tokens started to rise. Reuters reported that Terraform Labs and its CEO, Do Kwon, reached a preliminary “principle” agreement with the SEC regarding the fraud case. Previously, the SEC had demanded approximately $4.7 billion in disgorgement proceeds and pre-judgment interest, as well as a total of $520 million in civil penalties from Do Kwon and Terraform. Terraform’s legal team proposed a $1 million civil penalty without disgorgement proceeds. Both parties will submit additional offers by May 6th and May 1st, respectively.

As a result of the news of Terraform Labs reaching a settlement with the SEC, LUNA surged by more than 30% in a short period. LUNA soared from $0.59 to $0.811 during the day. Although the token later lost some ground, it continues to fly high. At the time of writing, LUNA was trading at $0.79.

LUNA_Token

By the way, another token of the Terra ecosystem, LUNC, also saw a price increase. While not as significant as LUNA, LUNC experienced an increase of up to 10%. The ecosystem’s stablecoin, USTC, also showed a similar performance.

Latest developments in the Terraform Labs case

This development occurred less than two months after the start of a fraud case filed in New York against Kwon and Terraform Labs. In the middle of the trial, the SEC expressed its intention to impose a penalty of $5.3 billion to settle the case. This would be the largest monetary penalty ever imposed on a cryptocurrency project.

A fraud lawsuit filed against Kwon and Terraform Labs in New York

The title of the court list referred to a telephone conference held on May 29th “without transcription or recording.” All parties’ attorneys were present. Upon the parties informing the court that they had reached a principle agreement, the oral argument previously scheduled for May 29th was canceled. The parties are required to submit necessary documents to Judge Jed S. Rakoff by June 12th to support the settlement.

Do Kwon is currently out on bail in Montenegro. He is awaiting extradition to the United States or South Korea. Kwon also faces criminal charges in South Korea, in addition to New York.

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