Terraform Labs, a blockchain startup, has agreed to settle charges with the Securities and Exchange Commission (SEC) for $4.47 billion, ending a two-year legal battle.

Settlement Details

The settlement includes $3.58 billion in disgorgement and $420 million in a civil penalty. The company agreed to settle in principle a few weeks ago and filed the settlement details with the court on June 12.

Background

Terraform Labs came under scrutiny in 2022 when its co-founder Do Kwon was accused of fraudulent activities. The company's tokens, Terra (LUNA) and TerraUSD (USTC), were liquidated, causing a market collapse that wiped out over $40 billion. The ecosystem is still recovering from the shock.

Legal Issues

Do Kwon has faced severe legal issues, including extradition cases. He was blocked by the Appeals Court of Montenegro from being extradited to South Korea.

Comparison to Binance

Terraform Labs is not the only company to settle with the SEC. Binance Exchange settled with the Department of Justice (DOJ) for $4.3 billion in a long-standing probe. The settlement saw the resignation of founder Changpeng ‘CZ’ Zhao, who is currently in jail.

Conclusion

The settlement marks the end of a long and tumultuous legal battle for Terraform Labs. The company's agreement to settle with the SEC brings closure to the case and allows the company to move forward.