The US Securities and Exchange Commission (SEC) wants nearly $5.3 billion in fines from Terraform Labs and its former CEO, Do Kwon for violations of the US securities laws and charges of fraud.
The agency detailed its requested fines in an April 19 legal filing. The SEC is primarily seeking $4.2 billion in disgorgement plus $545.7 million in prejudgment interest.
The disgorgement aims to have Terraform Labs and Kwon surrender “unjust enrichment” earned from token sales to institutional investors, sales via a Luna Foundation Guard contract with Genesis Asia Pacific, and sales on crypto exchanges between June 2021 and May 2022.
The regulator is also seeking civil penalties, including a $420 million fine against Terraform Labs and a $100 million fine against Kwon.
The SEC said each civil penalty is a small fraction of the defendants’ ill-gotten gains but acts as punishment and deterrence.
Additional restrictions
The SEC also requested nonmonetary remedies, including “obey-the-law
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