The request made by the Securities and Exchange Commission (SEC) for Terraform Labs and its co-founder, Do Kwon, to pay $5.3 billion in disgorgement and civil penalties has been met with opposition from the company’s legal team. They have submitted a motion stating that a $1 million civil penalty would be a more suitable amount.
Following a trial where Terraform and Kwon were found guilty of fraud, their defense team filed a request for the maximum civil penalty of $1 million on April 26 in the U.S. District Court for the Southern District of New York.
Terraform argued that the funds would have to be collected from the Luna Foundation Guard (LFG), a non-party in the civil action. Therefore, they claimed that the court should not grant any injunctive relief or disgorgement.
In their filing, Terraform stated that a $1 million civil penalty would be far more appropriate than the multi-billion dollar request made by the SEC. Additionally, Kwon, in a separate filing, expressed his opposition to the commission’s proposed remedy of disclosing all of his financial accounts and assets, citing that it would violate his Fifth Amendment right against self-incrimination.
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