TerraForm Labs CEO Do Kown Settles with SEC
U.S. District Judge Jed Rakoff ordered both parties to finalize and submit the settlement terms by June 12, 2024
May 31, 2024 11:51 AM
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TL;DR Following the settlement news, the Luna Foundation Guard transferred $95 million of BNB and AVAX tokens to an unknown address. Details of the transfer and its implications remain unclear, sparking speculation. Details of the settlement between the SEC and Kwon are also unknown.
A blockchain address linked to the Luna Foundation Guard (LFG), the company behind the Terra ecosystem, moved substantial amounts of cryptocurrencies earlier today.
Data from the popular analytic platform Arkham Intelligence shows that the LFG address transferred 1,974,002.88 (1.97 million) Avalanche (AVAX) tokens and 39,498 Binance Coin (BNB) to an unidentified address.
The Transaction
The total value of the transaction, which occurred today at exactly 03:33 AM (UTC), was approximately $95 million. At press time, the LFG's address still holds $94.27 million worth of AVAX and BNB tokens.
Meanwhile, the LFG is known for moving vast amounts of crypto assets over the years. In November 2022, the company claimed it spent $2.8 billion defending the de-pegged algorithmic stablecoin TerraUSD (UST).
TerraForm Labs has yet to disclose why it made the suspicious transfers.
Settlement with the SEC
The transfers followed news of a settlement between Do Kwon, the founder of TerraForm Labs, and the United States Securities and Exchange Commission (SEC). Court records show the parties settled the principle before U.S. District Judge Jed Rakoff on May 29.
Consequently, the court ordered the parties to finalize and submit the settlement terms by June 12, 2024.
Recall that in April, the SEC asked the court to impose $5.3 billion in civil penalties, disgorgement, and prejudgment interest against Kwon and TerraForm Labs.
The regulatory agency requested after the court found Kwon and Terra liable for fraud following the collapse of the Terra ecosystem.
However, the defendants proposed a significantly lower penalty of $1 million as it urged the court to dismiss the SEC's disgorgement request.
Unanswered Questions
The final terms of the settlement remain unclear at the time of writing. Nonetheless, the public could get more details about the settlement when the parties file these final terms on June 12 for the court's approval.
As of press time, it remains unclear whether the LFG's recently transferred $95 million worth of AVAX and BNB tokens is part of the settlement deal.
The crypto community continues to monitor this development closely, as it may have broader implications for the Terra ecosystem and its stakeholders.
