Terraform Labs Suggests a $1M Penalty

Reading Time: < 1 minute

Lawyers representing Terraform Labs have filed a response to the United States Securities and Exchange Commission’s (SEC) request for $5.3 billion in disgorgement and civil penalties against the firm and its co-founder Do Kwon.

The filing, made on April 26 in the US District Court for the Southern District of New York, argued that the court should impose a maximum civil penalty of $1 million after a jury found Terraform and Kwon liable for fraud.

The legal team stated that the court should not grant any additional relief, including disgorgement, as the funds would have to be obtained from the Luna Foundation Guard (LFG), a non-party in the case.

The filing further explained that the SEC did not name LFG as a defendant or a relief defendant, thus prohibiting them from seeking disgorgement from the LFG funds. The funds in question belong to LFG and were obtained through token sales conducted by them, not Terraform Labs.