SINGAPORE-BASED Terraform Labs and its founder Do Kwon have reached a tentative settlement with the US Securities and Exchange Commission (SEC) which sued them for allegedly misleading cryptocurrency investors before the 2022 collapse of the stablecoin TerraUSD.
The deal but not its terms was disclosed on a court website. A jury found Kwon and Terraform Labs liable on civil fraud charges at trial in April.
The SEC had accused the company and Kwon of misleading investors in 2021 about the stability of TerraUSD, a stablecoin designed to maintain a value of US$1. The regulator also accused them of falsely claiming Terraform’s blockchain was used in a popular Korean mobile payment app.
US district judge Jed Rakoff in Manhattan asked the SEC and the defendants to file papers supporting the settlement by Jun 12. REUTERS
