Terraform Labs Bankrupt, Company Agrees To Pay IDR 73 Trillion To SEC

Terraform Labs, which has filed for bankruptcy, agreed to pay nearly 4.5 billion US Dollars (approximately IDR 73 trillion) to the United States Securities and Exchange Commission (SEC). This deal, which is still awaiting court approval, is one of the biggest settlements in the history of financial regulation.

According to Blockworks information, the bankruptcy filed on Wednesday revealed that Terraform Labs had to pay an amount of US$3.5 billion (approximately Rp57.2 trillion) for the disputement, more than US$460 million (approximately Rp7.5 trillion) in prejudgment interest, and US$420 million (approximately Rp6.8 trillion) as civil penalties. Do Kwon, the former CEO of Terraform, will account for 200 million US Dollars (approximately Rp3.2 trillion) into the company's bankruptcy assets.

SEC response

The SEC, in its statement, confirmed that the deal was designed to tackle major fraud' by implementing significant remedial action and penalties. They hope to provide mean and fast recovery for investor victims, which collectively loses billions when the Terraform scheme collapses.

The penalty imposed included 420 million US Dollars from Terraform and 80 million US Dollars from Kwon considered by the SEC to be very appropriate and aimed at sending strong deterrence messages to those who might be planning a similar fraudulent scheme.

Terraform and Kwon, who were declared responsible for one of the largest securities scams in US history, are now facing the consequences of their actions. Kwon, who was barred from serving as an official or director of a public company, became the end of his career in the financial industry.

TerraUSD's fall in 2022 is an event that rocked the crypto market, and with this settlement, the SEC hopes to restore trust and provide justice for disadvantaged investors.