Critical New Development in Terra (LUNA) and SEC Lawsuit: Billions of Dollars Are Talked About

The SEC, which filed for a final decision two weeks after the conclusion of the hearing, is demanding that Terraform Labs and Kwon pay $4.74 billion in damages and precautionary interest. Furthermore, the regulator is seeking damages totaling $520 million, including $420 million from Terraform Labs and $100 million directly from Kwon.

In an attached fact sheet filed with the court, SEC justified the total amount by stating that Kwon and Terraform Labs "have made over $4 billion in ill-gotten gains (and possibly much more) from their illegal conduct."

SEC added that the amount of the penalty represents a "conservative" but "reasonable approach" of Terraform and Kwon's "ill-gotten gains."

In addition to the hefty fines, SEC is also seeking injunctions to prevent Kwon and Terraform Labs from committing further securities violations and buying or selling "any crypto-asset securities." The regulator is also seeking a ban on officers and directors that would prohibit Kwon from serving as officers or directors in a publicly traded company reported by the SEC.
SEC noted that such measures are necessary to deter future violations, since "the defendants have not shown remorse for their conduct and cannot be doubted that they are in a position where additional violations are not only possible, but probably already occur."

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