Terraform and Do Kwon Settlement with SEC Announced

A court record notes that Terraform Labs and co-founder Do Kwon “reached a settlement in principle” with the U.S. Securities Exchange Commission (SEC).

An entry posted on Thursday indicated that a previously scheduled oral argument intended for May 29 had been canceled and that a non-recorded telephone conference on Wednesday had also been called off.

“The oral argument previously set for 5/29/2024 has been canceled because the parties have informed the Court that they reached a settlement in principle,” the petition states. “The parties must file, by 6/12/2024, papers in support of a proposed final judgment consistent with the settlement.”

Related: SEC Charges Terraform Labs and Do Kwon with $4 Billion Fraud

Over the algorithmic stablecoin TerraUSD (UST), which crashed a year earlier, the SEC prosecuted Terraform and Kwon in February 2023. Only a few weeks ago, both sides were debating minute quantities. While the SEC has recommended they pay $5.3 billion, lawyers representing Terraform and Kwon said fines should be closer to $1 million.

Even without Kwon, the Terraform trial against the SEC began in late March. April saw Terraform and Kwon found guilty of civil fraud after a jury determined they misled investors. The jury mostly looked at the SEC’s allegations that Kwon and Terraform engaged in fraud linked to the purchasing and selling of Terraform shares, therefore breaching federal securities laws.

The former executive has been caught entangled in a back-and-forth between being extradited to the United States or South Korea. Using a fake passport while trying to leave Montenegro, Kwon was detained in March 2023.