As an analyst with a background in finance and experience following the cryptocurrency market closely, I find the Terraform Labs settlement with the SEC a significant development. The $4.47 billion settlement, which includes disgorgement, civil penalty, and prejudgment interest, is a large sum that raises questions about its feasibility for Terraform Labs to pay.
As a crypto investor, I’d put it like this: Terraform Labs, the team behind the successful cryptocurrency project Terra, has come to an understanding with the US Securities and Exchange Commission (SEC), agreeing to pay a hefty sum of $4.47 billion in settlement.
After being involved in the $40 billion liquidation of investor funds in 2022 that left Terraform perplexed, the company is now obligated to make several payments according to the settlement. This includes a payment of $3.58 billion for disgorgement, a civil penalty of $420 million, and an additional $6,976,931 in prejudgment interest.
The terms of the settlement have sparked debate, with notable figures in the cryptocurrency industry voicing their dissatisfaction. Notably, Coinbase’s Chief Legal Officer, Paul Grewal, has raised concerns about the sufficiency of the settlement for Terra’s affected investors. He questions the SEC’s role as an unsecured creditor in Terraform’s bankruptcy proceedings and casts doubt on whether the $7 million in assets surrendered by Do Kwon, Terra’s co-founder, is enough to offset the losses endured by investors.
Ki Young Ju, the CEO of CryptoQuant, shares the same concerns and wonders if Terraform Labs can actually cover the proposed settlement sum. He has raised this query for clarification.
Zach Rynes, representing Chainlink as a community liaison, expressed frustration that the funds from the Terra collapse were being allocated to the Securities and Exchange Commission (SEC), instead of going directly to the affected individuals. The proposed settlement awaits the judge’s approval from Jed Rakoff at the US District Court for the Southern District of New York.
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2024-06-13 05:40