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Terraform Labs agreed to pay a bigger penalty than the fine the U.S. Justice Department levied on crypto exchange Binance.
According to court filings on Wednesday, Terraform Labs reached a $4.47 billion settlement with the U.S. Securities and Exchange Commission (SEC) related to the implosion of TerraLuna (LUNC) and TerraUSD (UST).
The proposed penalty submitted by SEC prosecutors followed a two-week trial in March and a preliminary deal disclosed late last month. A jury determined that both Terraform and its founder, Do Kwon, were legally responsible for the company’s crash in 2022.
The settlement is subject to approval from a New York judge and could be one of the largest settlements between a crypto entity and a U.S. regulator. The SEC initially sought $5.3 billion in fines from both parties.
Federal prosecutors initially argued for $4.7 billion in disgorgement, accompanied by a combined $520 million in civil penalties from the firm and Kwon.
Terraform’s founder extradition
Do Kwon is also awaiting extradition in the Balkans, pending approval for his removal to either the U.S. or his home nation, South Korea.
Kwon’s sentence for travel paper fraud expired in March, and the fugitive was released on home arrest from Spuž prison in Montenegro. The one-time crypto mogul was previously on the run, after Terra’s $60 billion collapse reverberated through the digital asset industry and unleashed cascading bankruptcies on several entities.
Extradition to America or South Korea was approved on several occasions. However, the decisions were overturned in a continued back-and-forth between attorneys and Montenegro’s judicial system. At press time, Kwon’s extradition destination is yet unknown but the former crypto-billionaire could face long years in prison over his role in Terra’s tumble.