Coinbase's Chief Legal Officer, Paul Grewal, has expressed skepticism about the Securities and Exchange Commission's (SEC) $4.47 billion settlement with Do Kwon and the now-defunct Terraform Labs. Grewal doubts the settlement's ability to provide practical solutions to the victims of Terraform's fraudulent practices, which led to significant financial losses.

Grewal criticized the SEC's approach to the case, stating that the settlement only requires the SEC to be treated as an unsecured creditor in Terraform's bankruptcy case and forces Kwon to surrender only $7 million of his assets. This, he believes, does not go far enough in providing adequate compensation to the victims of Terraform's fraudulent activities.

Other influential figures in the crypto space have shared similar concerns. Ki Young Ju, CEO of CryptoQuant, questioned the legitimacy of Terraform Labs' financial activities, suggesting that it was unrealistic for the company to possess such funds for the settlement. This sentiment reflects the general distrust within the crypto community about Terraform Labs' transparency and moral standards.

The settlement agreement requires Terraform Labs to pay the SEC $3.58 billion in disgorgement and $420 million in civil penalties. However, the crypto community and industry leaders are concerned about how the settlement funds will be distributed and where they will end up. Zach Rynes, a community liaison at Chainlink, expressed discontent that the settlement will be paid to the SEC instead of the affected people of Terra's collapse.

This criticism highlights the need for regulatory measures to focus more on investor protection and the return of stolen funds.