The agency asked the federal judge to approve the settlement today.
One of the largest collapses in the history of crypto is finally getting closure.
Terraform Labs, the company behind now-defunct UST stablecoin, has agreed to pay the U.S. Securities and Exchange Commission $4.47 billion. According to Bloomberg, the SEC asked a federal judge in the United States Southern District of New York to approve the settlement.
The deal comes two months after a unanimous jury decision that found Terraform Labs and its co-founder Do Kwon misled investors, acted recklessly, and were liable for civil fraud.
Terraform will pay roughly $3.59 billion plus interest, along with a $420 million penalty. Meanwhile, Kwon will pay $204.3 million, including $110 million in disgorgement, interest and an $80 million penalty, a court filing showed.
LUNA, the token of the Terra blockchain, is up 2.3% to $0.56. The network has shed nearly 50% of its value since the April jury decision, down to $384 million from $634 million.
Although these numbers are high, they are only a fraction of what Terraform wiped out of the market when it collapsed in May 2022.
In 2022, Terraform Labs – led by the now-detained Do Kwon – launched its native token, LUNA, and an algorithmic stablecoin, UST, which was backed by LUNA. UST lost its peg after a sharp drop in the price of LUNA, which caused a downward price spiral and run on deposits which wiped out nearly $50 billion of UST’s market cap in a matter of days.
The collapse inflicted such wounds that two years later, Terra-induced PTSD continues to sound the alarms on any project that offers double-digit yields.
However, the $4.4 billion settlement raises eyebrows. Many wonder whether Terraform Labs even has the money to pay off the debt.
