Do-Hyung Kwon Reach Preliminary Agreement with SEC on Terra-Luna Collapse Penalties

Terraform Labs and its co-founder Do-Hyung Kwon have reached a preliminary agreement on disgorgement and penalties related to the collapse of the cryptocurrency Terra-Luna. According to the U.S. District Court for the Southern District of New York, Terraform Labs, Kwon, and the SEC have agreed in principle to impose fines, though the specifics are undisclosed. The parties must submit settlement documents by June 12.

The SEC filed a lawsuit against Kwon and Terraform Labs in November 2021, alleging they misled investors about Terra’s stability, leading to losses exceeding $40 billion. Judge Jed Leikoff ruled that Terra was a security and that Terraform Labs sold unregistered securities, siding with the SEC. The SEC sought $5.26 billion in disgorgement and penalties.

Kwon has been on the run since March last year and was arrested in Montenegro on passport forgery charges. He faces multiple charges in the U.S. and South Korea, leading to a tug-of-war over his extradition. His final destination remains uncertain.

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