SEC and Terraform Labs Settle for $4.47 Billion

IconCryptoNewsTerminal Staff13 Jun, 2024

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SEC and Terraform Labs Settle for $4.47 Billion

SEC and Terraform Labs Settle for $4.47 Billion The US Securities and Exchange Commission (SEC) and Terraform Labs have agreed to a $4.47 billion settlement, according to TheTern. This settlement resolves the SEC's allegations that Terraform Labs misled investors about its products and failed to register them as securities. As part of the settlement, Terraform Labs will pay a penalty of $1.4 billion and disgorgement of $3.07 billion. The company will also register its products with the SEC and hire an independent compliance consultant. The SEC's investigation found that Terraform Labs promoted and sold its TerraUSD (UST) stablecoin and Luna token as investment products without disclosing the risks involved. The SEC also found that Terraform Labs failed to register these products as securities, which allowed the company to avoid regulatory oversight. The collapse of TerraUSD and Luna in May 2022 caused billions of dollars in losses for investors. The SEC's settlement is a major step towards holding Terraform Labs accountable for its actions and protecting investors in the digital asset market.

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