Terraform suggests imposing $1M fine in SEC lawsuit, with no exemption or repayment

Terraform Labs’ legal representatives have lodged a motion against the US Securities and Exchange Commission’s (SEC) request for $5.3 billion in disgorgement and civil penalties against the company and its co-founder, Do Kwon. In a filing to the US District Court, Terraform’s lawyers proposed that a maximum civil penalty of $1 million should be imposed, arguing against granting injunctive relief or disgorgement as the funds would have to come from the Luna Foundation Guard (LFG), a non-party in the case. Terraform claimed that a $1 million civil penalty would be more appropriate compared to the SEC’s multibillion-dollar proposal. Kwon, in a separate filing, opposed the commission’s motion and argued that providing complete details of his accounts and assets would violate his Fifth Amendment rights. A jury found Terraform and Kwon liable for defrauding investors in April, and the judge has yet to rule on the proposed remedies. Kwon was not present at the trial due to travel restrictions imposed on him after his arrest in March 2023 for using falsified travel documents. Extradition requests from the US and South Korea are currently being considered by local authorities.