Terraform Labs, the company involved in a major collapse in 2022, has agreed to pay a substantial settlement of $4.47 billion to resolve a civil lawsuit brought by the US Securities and Exchange Commission (SEC). This legal action followed the collapse, which resulted in the loss of $40 billion in investor assets and had significant repercussions across the cryptocurrency industry.

The SEC sought approval from a federal judge in New York for the settlement with Terraform, which was reached after a jury found the company and its co-founder, Do Kwon, responsible for the collapse following a two-week trial.

According to the settlement filing, "Kwon will pay monetary remedies totaling no less than $204,320,196, with $4,700,000 to be transferred into an agreed escrow account within 30 days of Final Judgment."

This settlement marks a victory for the SEC, which alleged that from April 2018 to May 2022, Terraform and Kwon conducted unregistered transactions involving crypto asset "securities" and engaged in fraudulent activities that led to the significant loss of market value amounting to at least $40 billion.

Additionally, regulators accused the defendants of misleading investors about the stability of TerraUSD and falsely claiming integration of Terraform's blockchain into popular Korean mobile payment apps.

This resolution is significant as Terraform Labs and its founder, Do Kwon, face extradition to the US. Previously, they had proposed civil penalties amounting to $3.5 million, with Do Kwon suggesting a penalty of $800,000.

As of the latest update, Terraform Labs' Luna Classic (LUNC) token is trading at $0.0001076, reflecting an increase of nearly 8% over the past 24 hours.