The crypto community is raising eyebrows over Terraform Labs' ability to pay the massive $4.75 billion settlement to the SEC, given their reported $75 million in known assets. The question on everyone's mind is: where will they find the additional $3.75 billion?

CryptoQuant founder Ki Young Ju has expressed skepticism about the source of this substantial sum, questioning whether it was used to restore the UST peg and expressing suspicion over the transaction. "Where does this money come from? Did they actually use it to restore the peg? Sus," he stated. He also pointed out that the $4.47 billion cash-out is implausible, even if Terraform's market cap is $40 billion, and that neither Do Kwon nor Terraform Labs should possess such a substantial amount of funds.

Terraform Labs has only $75 million worth of assets in their "known" wallet, leaving the question of where they will find the additional $3.75 billion unanswered. David Hoffman, the co-founder of Bankless and Ethereum contributor, has also expressed doubts about the settlement, stating that if Terraform Labs actually has $4.5 billion in assets and if it is paid as a fine to the U.S. SEC instead of the users who lost it, it will be one of the craziest examples of agency corruption in our lifetimes.

The current settlement with Terraform Labs involves disgorgement to the bankrupt estate instead of any direct payment to the SEC. The judgment includes $4.05 billion in disgorgement in addition to interest and a $420 million civil fine. Considering Terra's bankruptcy filing in January, they are unlikely to pay much of the total settlement amount. Rather, it will be treated as an unsecured claim in the Chapter 11 liquidation process. Terra founder Do Kwon has also agreed to a ban on crypto transactions and shall transfer $204 million to Terraform's bankruptcy estate.