(2022)
SEC v. Terraform Labs
Year
2022
Criminal or Civil
Civil
Year Resolved
2024 (final judgment), with claim process continuing into 2025
Jurisdiction (Court/State)
“U.S. District Court, Southern District of New York
Bankruptcy: U.S. Bankruptcy Court, District of Delaware (Case No. 24-10070)”
Filed By
U.S. Securities and Exchange Commission (SEC)
Penalty/Fine (USD)
“$4,473,828,306 (to be satisfied through bankruptcy payouts to investors)
$204,320,196 from Kwon to bankruptcy estate (includes crypto assets)”
Lawsuit Overview
Terraform Labs and founder Do Hyeong Kwon were charged by the SEC for conducting a multi-billion-dollar crypto fraud involving unregistered securities (LUNA and UST). A final judgment in June 2024 required Terraform to pay $4.47 billion in disgorgement, penalties, and interest. Recovery will be handled through the company’s Chapter 11 liquidation process.
Category
Fraud, Unregistered Securities Offering, Market Manipulation
Notable Individuals Involved
Do Hyeong Kwon (founder)
Luna Foundation Guard (involved assets)
Todd Snyder (liquidation trustee)
Investor Loss Estimate
Estimated in the billions; at least $4.47B in penalties imposed to address investor losses
Final Outcome
Settled with consent judgment; Chapter 11 liquidation ongoing under court supervision
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