Bittime - Do Kwon, one of the founders of Terraform Labs, is preparing to face trial in South Korea regarding the collapse of a DeFi worth $60 billion (around IDR 870 trillion) in May 2022. However, it turns out that the United States (US) through the Securities and Exchange Commission (SEC) have not "moved on" from this case.
Do Kwon Demanded Compensation of IDR 77 Trillion
The US SEC is demanding a fine of $5.3 billion (around Rp. 77 trillion) from Kwon and Terraform Labs. This figure is even larger than the fine paid by Binance, amounting to $4.3 billion (around IDR 63 trillion) in 2023, for violations of US banking law.
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Investors Lose Everything, Terraform Labs Makes a Profit
According to the SEC, in court documents filed on April 19, Kwon had committed fraud against Terra investors by providing false information regarding the use of UST stablecoin and other products. As a result, investors "lost everything," while Terraform Labs and Kwon made profits of more than $4 billion (around Rp. 58 trillion) from their "illegal behavior."
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In addition to the fine, the SEC also requested that Kwon be prohibited from serving as a senior officer or director in any public company. This is a common step in cases of suspected investment fraud. Kwon himself denied all these accusations.
From Private Jet To Court
The case filed by the SEC is a reminder that in addition to criminal charges filed by South Korean prosecutors and a US grand jury, Kwon also still faces civil lawsuits.
Previously, Kwon had hidden from South Korean authorities and Interpol for most of 2022. He was finally arrested by Montenegrin officers on March 23, 2023 while trying to escape from Podgorica Airport to Dubai using a private jet.
Kwon and his partner, Han Chang-joon, were found guilty of using fake Costa Rican passports to leave Montenegro. Han was extradited to South Korea last February. After months of trial, Kwon was ordered to return to South Korea instead of the US, which also accused him of fraud.
In the latest filing, the SEC asked the court to order Kwon and Terraform Labs to pay $4.2 billion (around IDR 61 trillion) of profits generated from the Terra stablecoin project. The commission also wants more than $546 million (around Rp. 8 trillion) in pre-judgment interest and another $520 million (around Rp. 7.6 trillion).
Conclusion
Do Kwon doesn't seem to be able to escape the law. He faces trial in South Korea and demands for a large fine from the US SEC. This case is an important reminder about the risks and regulations in the world of cryptocurrency.
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