BITCOINCRYPTOCURENCCYDAILY NEWSDIGITAL CURRENCYHOT NEWS

Do Kwon Crypto Bookie Company Agrees to Pay Fine of IDR 73 T

Newyork – Terraform Labs, the company owned by bankrupt crypto tycoon Do Kwon, on Wednesday agreed to one of the largest fines in history to settle a securities fraud lawsuit.
Quoting the Wall Street Journal, the company agreed to pay the Securities and Exchange Commission (SEC) almost US$4.5 billion (Rp. 73.30 trillion), and stop its operations. Kwon himself personally agreed to pay US$204 million (Rp. 3.32 trillion) as part of the deal.

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Meanwhile, the former chief executive of Terraform Labs was arrested last year in the Balkan country of Montenegro, where he remains in immigration detention. Both the US and South Korea are seeking his extradition.

The court still needs to approve the deal between Terraform Labs and the SEC. If approved, the settlement would be one of the biggest achievements to date by authorities worldwide, following the May 2022 collapse of Kwon’s TerraUSD and Luna cryptocurrencies.

However, the SEC may only receive a small portion, if any, of the fine. Because, Terraform Labs is in the process of bankruptcy and says its assets are less than half a billion dollars.

The collapse of his cryptocurrency in 2022 wiped out around US$40 billion in valuation from the digital currency market and wiped out the savings of thousands of investors around the world.

Kwon spoke highly of TerraUSD and Luna before the fallout occurred. He mocked his critics on social media as “idiots” and told one: “I don’t argue with poor people on Twitter.”

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A New York jury in April found Kwon and Terraform Labs liable for securities fraud after a two-week civil trial. The SEC is also following up legally as part of its years-long effort to curb crypto players who do not comply with the law.

The SEC said in a letter to U.S. District Judge Jed Rakoff on Wednesday that the multibillion-dollar fine was a fair punishment for “one of the largest securities frauds in U.S. history.”

“If approved, the proposed ruling will send a clear message of deterrence not only to those involved in unintentional violations, but also to all those who seek to circumvent the requirements of the federal securities laws by establishing new standards of conduct for crypto assets that fall under under the scope of federal securities laws,” said the SEC, quoted from the Wall Street Journal, Thursday (13/6/2024).

A Terraform spokesperson declined a request for comment.

At the same time, Terraform was filing for bankruptcy in January, saying it could be forced out of business if it loses an upcoming fraud trial. In an April 30 court filing, Terraform said it had assets of US$430.1 million, against liabilities of US$450.9 million.

Even if Terraform’s bankruptcy process finds the money to pay the SEC, the agency will have to fall in line behind other creditors. The fine will count as a general unsecured claim in Terraform’s bankruptcy case, meaning that higher priority creditors, such as lenders, will be paid first before the money goes to the SEC.

 

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