Terraform Labs and Do Kwon Challenge the Proposed $5.3B Penalty: Report

• Terraform Labs challenges the huge $5.3 billion penalty imposed by the SEC in the legal case.
• The firm requests the court for a lower penalty of $1 million arguing that Terraform’s most of the stablecoins were sold overseas.
• Judge Jed Rakoff orders the lawyers representing Terraform and the SEC to assemble in the court on May 22.

According to a recent Bloomberg report, Terraform Labs and its founder, Do Kwon, challenged the huge $5.3 billion penalty proposed by the Securities and Exchange Commission (SEC) in the lawsuit. Claiming that most of the firm’s stablecoins were sold overseas, the company requested the court to charge a significantly lower penalty of $1 million.

On April 5, a jury found Do Kwon liable for the collapse of the collapse of Terraform, which wiped out $40 billion in investor assets, leading to a severe crypto winter. While Kwon and Terraform were found guilty of defrauding investors regarding the sale of TerraUSD (UST), Luna (LUNA), and wLUNA, the regulators sought approximately $4.7 billion in disgorgement and prejudgment interest from them. In addition, the SEC charged a total of $520 million in civil penalties.

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