The U.S. Securities and Exchange Commission (SEC) is reportedly seeking to impose a massive fine on Do Kwon, the disgraced founder of the Terra ecosystem. According to Bloomberg, the regulatory agency is looking to impose a $5.3 billion fine on Kwon for his alleged “brazen misconduct” that led to the downfall of the Terra ecosystem in 2022.
Kwon and his company, Terraform Labs, were found guilty of committing fraud during a recent trial, which could result in the largest fine ever imposed on the crypto industry. The report reveals that Kwon and Terraform Labs made nearly $4 billion by selling tokens that were not registered as securities.
The proposed fine would consist of a $4.2 billion disgorgement penalty, $545 million in prejudgment interest, and $420 million and $100 million in civil penalties for Terraform Labs and Kwon, respectively.
However, Kwon’s defense attorneys argue that since the token sales occurred outside of the United States, they did not violate federal laws.
Kwon was initially arrested in Montenegro, a Balkan nation, in 2023 while attempting to board a flight to the United Arab Emirates using a forged Costa Rican passport. He is currently awaiting extradition to the United States and South Korea, where authorities are seeking his arrest for his involvement in the $40 billion collapse of the Terra ecosystem.
