Terraform and Do Kwon Reach Settlement in SEC Fraud Case, Resulting in LUNA Price Surge as Investors Find Relief

Terraform Labs and its co-founder, Do Kwon, have reached an agreement with the U.S. Securities and Exchange Commission (SEC) to settle a civil fraud case related to the collapse of their ecosystem in May 2022. This settlement, although still pending finalization, has had a positive impact on the market, with Terraform’s LUNA token surging by up to 38% following the announcement.

The settlement agreement was reached during a conference on May 29, and the previously scheduled oral arguments were cancelled as a result. The settlement documents are expected to be filed by June 12 and will be presented to Judge Jed S. Rakoff.

Investors and stakeholders have responded positively to the news, finding temporary relief and optimism in the resolution of the legal uncertainties surrounding Terraform Labs and Do Kwon. The surge in the value of the LUNA token reflects this investor optimism.

However, while the civil case with the SEC is being settled, Do Kwon still faces extradition and potential criminal charges. He is currently out on bail in Montenegro, waiting to be extradited to either the U.S. or South Korea. The SEC initially proposed a $5.3 billion penalty to resolve the fraud case, which would be the largest fine ever imposed on a crypto project. Terraform Labs, amidst bankruptcy proceedings, is contesting this proposed penalty, arguing for a more appropriate civil fine given its remaining assets of approximately $150 million.

The future of Do Kwon remains uncertain, with the crypto world eagerly awaiting the outcome of the extradition and potential trial.