Terra announced its dissolution after settling with the SEC for a sky-high price! LUNA plunges 20% in a week

This site (120bTC.coM): The public chain Terra ecological algorithm stable currency UST and the native token LUNA suffered a thunderstorm in May 2022, causing global investors to lose US$40 billion. Development Terraform Labs and founder Do Kwon were sued by the U.S. Securities and Exchange Commission (SEC) in February last year.

In April this year, a New York federal jury formally found Do Kwon and Terraform Labs guilty of fraud. After losing the case, Do Kwon and Terraform Labs, which originally refused to pay the US$5.3 billion fine requested by the SEC and argued that the SEC had no right to sue, reached a preliminary settlement with the SEC at the end of May. The terms of the settlement will be finalized before June 12, 2024. , and submitted to the court for approval.

US Court Approves Settlement Agreement

In this context, Judge Jed Rakoff of the US Federal Court in New York approved the settlement agreement between Terraform Lans, Do Kwon and the SEC yesterday (13th).

According to the settlement agreement, Terraform Labs and Kwon will not only have to pay approximately US$4.47 billion and US$204.3 million in fines to the SEC respectively, but Kwon will also be prohibited from serving as a senior executive or director of a listed company. In addition, the agreement will permanently prohibit Kwon and Terraform Labs from buying and selling crypto-asset “securities,” including all tokens in the Terra ecosystem.

In addition, the settlement agreement also requires Terraform Labs to wind down its operations "as soon as possible" and seek court approval of its liquidation plan in its Chapter 11 bankruptcy case, including replacing the company's directors and current CEO, and appointing 1 A trustee uses the remaining assets during the term to repay creditors and investors.

Terraform Labs is about to be disbanded

In addition, Terraform Labs CEO Chris Amani also posted on the social platform X yesterday that Terraform Labs will be officially dissolved and asked the community to take over projects within the Terra ecosystem , including Plusar Finance, Station Wallet and Enterprise DAO: TFL (Terraform Labs) intends to dissolve at some point, and that moment is now. We will close the business completely. Special thanks to the crazy guys who supported us throughout this process, and also to the TFL team. I'm extremely proud that we've been able to bring this company and ecosystem together and continue to build innovative products through it all. If we had won the trial we would have been able to speed things up, but unfortunately we lost and therefore can no longer operate. The community needs to take over ownership of the Terra chain. I'm sure there are several teams and developers wanting to do this, and you should see information in the forums soon. Our products will continue to work as we close and we will have a process running to sell @PulsarFinance, @StationWallet and @enterprise_dao

Additionally, Amani also stated that the team plans to put forward a community proposal that will All unvested Luna tokens will be burned: anything left in our wallet will be burned by TFL.

SEC Chairman: Whether the product complies with securities regulations should be judged by the substantial economics of the product

On the other hand, SEC Chairman Gary Gensler said at a press conference yesterday regarding the Terraform settlement: This case confirms that, The actual economics of a product determine whether it is a security under securities regulations, rather than relying on labeling, publicity or hype. At the same time, Gensler also said: Terraform and Do Kwon’s fraudulent activities have caused destruction to investors. The loss of sex and, in some cases, life savings. Their fraud is a reminder that when companies fail to follow the law, investors are harmed. Terraform and Kwon fought our investigative efforts – arguing over investigative subpoenas all the way to the Supreme Court. Thankfully, with this settlement, the victims of the massive fraud will now get some justice.

Luna plunged 20.3% in the past week

Just after the news that the SEC submitted a settlement agreement to the court came out, LUNA once rose by 10%, reaching a maximum of $0.6. However, selling pressure immediately emerged, and the price It once fell to US$0.5145, but rebounded slightly to US$0.5281 before the deadline. It fell 3.7% in the past 24 hours and dropped as much as 20.3% in the past week.

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