dailyhodl.com
The U.S. Securities and Exchange Commission (SEC) is reportedly looking to hit the disgraced founder of the Terra ecosystem with a multibillion-dollar fine.
According to a new report by Bloomberg, the regulatory agency is seeking a $5.3 billion fine against Do Kwon for his role in the downfall of the Terra ecosystem in 2022, alleging “brazen misconduct.”
Kwon and Terraform Labs were found liable for committing fraud during a trial earlier this month, paving the way for what could be the crypto industry’s largest fine yet. The report says that Kwon and Terraform made nearly $4 billion by selling tokens as unregistered securities.
The fine would be made up of a $4.2 billion disgorgement penalty, $545 million in prejudgment interest, as well as $420 million and $100 million in civil penalties for both the firm and Kwon, respectively, according to the report.
However, Kwon’s defense attorneys say that since token sales took place outside of the US, they couldn’t have possibly violated federal laws.
Kwon was initially arrested by authorities in the Balkan nation of Montenegro in 2023 after he was caught attempting to board a flight to the United Arab Emirates (UAE) with a forged Costa Rican passport.
He is currently awaiting extradition to both the US and South Korea, where he’s wanted by authorities for his role in the $40 billion collapse of the Terra ecosystem.