Terraform Labs and Do Kwon’s proposed remedies to be heard by US Court in May

Following a guilty verdict in a case brought by the United States Securities and Exchange Commission (SEC), Terraform Labs and its co-founder, Do Kwon, have been ordered to discuss potential remedies for their fraud charges. Federal Judge Jed Rakoff has called for a court appearance on May 22, where lawyers for the SEC, Kwon, and Terraform Labs will present arguments for proposed remedies. The SEC has requested approximately $4.7 billion in disgorgement and prejudgment interest, as well as $520 million in civil penalties. Terraform Labs, on the other hand, has suggested a $1 million civil penalty with no additional relief or disgorgement. Both parties have until May 6 and May 1, respectively, to file supplements to their proposals.
After a two-week trial, a jury found Terraform Labs and Kwon guilty of defrauding investors on April 5. Kwon was unable to attend the trial in person due to his arrest in Montenegro in 2023 for using falsified travel documents. He remains in Montenegro as extradition requests from the US and South Korea are being considered. It is unclear whether he will be able to attend the May 22 court appearance in the US.
Terraform Labs has been involved in bankruptcy proceedings since filing for Chapter 11 protection in January. The company reported estimated liabilities and assets ranging between $100 million and $500 million at the time.