Do Kwon’s blockchain protocol, Terraform Labs, is shutting down after reaching a settlement with the SEC.
Do Kwon’s blockchain protocol, Terraform Labs, declared on June 12 that it would shut down operations on Thursday following the settlement of its civil fraud lawsuit with the U.S. Securities and Exchange Commission (SEC).
Terraform Labs CEO Reveals Company Is “Winding Down”
The company’s current CEO, Chris Amani, said that Terraform always intended to dissolve and is now shutting down operations entirely in a series of X posts.
According to Amani, what remains of the now bankrupt crypto company will be sold to digital asset portfolio manager Pulsar Finance, wen3 interface Station Wallet, and DAO management firm Enterprise Protocol.
1/ With the proposed settlement now public, i can finally share some details about what is next for TFL.
— Chris Amani | Terra (@fleece_cannon) June 12, 2024
“I’m incredibly proud that we were able to hold this company and ecosystem together and continue to build innovative products through all of this,” Amani wrote. “We were well positioned to accelerate things if we had won the trial, but unfortunately we lost and as a result, can no longer operate.”
Do Kwon Versus The SEC
The $4.5 billion fine levied by the SEC on Wednesday against Kwon and his now-disgraced Terraform Labs is a significant reduction from the $5.3 billion that the federal regulator had originally requested in April.
Kwon’s attorneys resisted the SEC’s initial request, claiming that Kwon should only be subject to a $1 million maximum fine even though it would have cost $40 billion to remove Kwon from the cryptocurrency market.
“If approved, the proposed judgement will send an unmistakable deterrent message to not only those who engage in brazen misconduct, but also to all those who seek to evade the requirements of the federal securities laws by crafting new standards of behavior for crypto assets that fall under the purview of federal securities laws,” lawyers for the SEC wrote in a letter accompanying Wednesday’s settlement agreement.
Where To Next?
Two months have passed since Kwon was found accountable for the algorithmic stable coin crashes that caused Terra and Luna in the spring of 2022. News of Terraform Labs’ settlement and subsequent closure has just been released.
After the crash, Kwon managed to elude the law for several months by hiding out in different parts of Europe and Asia. Eventually, he was apprehended in Montenegro last spring while attempting to board a plane to leave the nation with forged documents.
Since then, Kwon has been detained in the nation of the Balkans while he awaits possible extradition to either South Korea, his birthplace, or the United States. The two nations are at odds over where Kwon will be sent to face additional punishment for his elaborate crypto fraud scheme.
It is said that additional details regarding the closure of the cryptocurrency company will be released in the upcoming weeks.