The cryptocurrency platform is officially done after costing investors $40 billion
Terraform Labs has agreed to a settlement with the US Securities and Exchange Commission (SEC) in which it will pay the regulator about $4.47 billion. The settlement comes Terraform Labs and co-founder Do Kwon were found liable for the company’s collapse, which resulted in $40 billion being lost by investors.
Terraform Labs CEO Chris Amani has announced that the company will halt all operations in the wake of the agreement and will sell essential Terra ecosystem projects. It will also give community control to the Terra blockchain.
“Terraform agreed to pay $3,586,875,883 in disgorgement, $466,952,423 in prejudgment interest, and a $420,000,000 civil penalty,” according to an SEC statement. Terraform must also cease sales of crypto asset securities, replace two company directors, close down operations, and have its remaining assets distributed to creditors and investors through a liquidation plan.
The settlement will be finalized after the pending bankruptcy case determines what Terraform Labs assets are left.
Terraform Labs became known outside of the cryptocurrency space when the price of TerraUSD fell from $1 to nine cents in 2022. It was touted as a “stablecoin” that would maintain its value by being pegged to the US dollar.
Kwon then fled to Montenegro, where he was detained and later incarcerated after attempting to exit the country using a fake passport. Since then, he’s been fighting extradition to the US and his home country of South Korea.
US authorities have since charged Terraform Labs with securities fraud, with a jury finding the company guilty in April.
