After reaching an agreement between the U.S. Securities and Exchange Commission (SEC) and Terraform Labs regarding the collapse of the ecosystem, the latter pledged to pay $4.47 billion.
On June 12, the regulator submitted a "proposed final consent decree" to the judge for approval.
"[The document] not only takes into account the scale of fraud, imposing substantial corrective, punitive and deterrent measures, including a multibillion-dollar payout, but also provides meaningful and prompt compensation to victim investors who collectively lost billions when the defendants' scheme collapsed," the SEC said.
The agreement includes the payment of $3.58 billion in compensation, $420 billion in civil fines and a ban on Terraform Labs co-founder Do Kwon from holding management positions in public firms.
Kwon will also have to contribute his own $204 million to the account of "company property for distribution to affected investors," the agency said.
"If approved, the proposed solution will send an unmistakable deterrent signal not only to those who commit brazen misconduct, but also to anyone who tries to circumvent the requirements of federal securities laws by developing new standards for crypto assets that are collapsing," SEC representatives added.
On April 5, a jury in the Southern District Court of New York found Terraform Labs and Kwon guilty of defrauding investors and securities fraud. The trial took nine days and was held in absentia.
Initially, the regulator proposed a fine of $5.3 billion for the company and its head. In turn, defense lawyers allowed the "maximum possible" payment of $3.4 million.
In early March, the Podgorica High Court approved the extradition of the businessman to the South Korean authorities. However, the prosecutor's office objected, claiming a violation of the procedure. Subsequently, the process was canceled.
Recall that in South Korea, numerous charges were brought against Kwon, including violations of capital markets legislation.
Earlier it became known that the co-founder of Terraform Labs will be released from prison at the end of his term for trying to cross the border with forged documents.