Terraform Labs and its founder Do Kwon have agreed to a tentative settlement with the US Securities and Exchange Commission (SEC).
According to court documents filed on Thursday, the Singapore-based crypto entity and Do Kwon had reached the agreement with the US regulator to settle the fraud case on May 29.
The development follows a recent court ruling that found Do Kwon and Terraform Labs guilty.
Terra (LUNA) token rockets 30% on news
Terra (LUNA) and Terra Classic (LUNC) prices jumped amid the news, with the LUNA token the biggest gainer as its value rose more than 30%.
According to data from CoinGecko, LUNA price reached highs of $0.77, having gone vertical from lows of $0.59 on Thursday afternoon. The token’s 24-hour gains currently stand at 29%, with the daily volume up 27% to over $42.4 million.
Meanwhile, LUNC price rose more than 10% to $0.0001284, up from lows of $0.00011259 as the news emerged. LUNC’s 24-hour trading volume was up 42% to over $66 million.
Both LUNA and LUNC tokens have however quickly pared some of the gains and currently trade 20% and 6% up in the past 24 hours respectively.
Before TerraUSD collapsed to ignite a meltdown, LUNA (before it changed to LUNC) traded at highs of $119 in April 2022.
US court found Do Kwon, Terraform Labs guilty of fraud
Terraform Labs and Do Kwon’s decision to agree a “settlement in principle” with SEC comes roughly two months after the SEC’s civil fraud case against them went to trial.
In April this year, a jury at the US District Court for the Southern District of New York delivered a guilty verdict against Terraform Labs and Do Kwon, finding them to be liable for fraud in relation to the collapse of TerraUSD in 2022.
The SEC looked to impose a $5.3 billion penalty, a scenario that both Kwon and Terraform Labs criticised as overboard.
Commenting on the jury’s verdict in the SEC proceedings, Terraform Labs wrote on X:
“We are very disappointed with the verdict, which we do not believe is supported by the evidence. We continue to maintain that the SEC does not have the legal authority to bring this case at all, and we are carefully weighing our options and next steps.”
Do Kwon, wanted in the US and in South Korea, remains in Montenegro where he was arrested in 2023. He is out on bail.
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