Terraform Labs, Do Kwon reach a 'settlement in principle' with US SEC, according to court entry

Terraform Labs and its co-founder Do Kwon have "reached a settlement in principle," with the U.S. Securities Exchange Commission, according to a court entry. 

A telephone conference, which was not recorded, was held on Wednesday and a previously planned oral argument set for May 29 had been canceled, according to an entry filed on Thursday.  

"The oral argument previously set for 5/29/2024 has been cancelled because the parties have informed the Court that they reached a settlement in principle," according to the filing. "The parties must file, by 6/12/2024, papers in support of a proposed final judgment consistent with the settlement."

The SEC charged Terraform and Kwon in February 2023 over the algorithmic stablecoin Terra USD (UST), which collapsed a year earlier. Just weeks ago, both sides were arguing over fine amounts. Lawyers for Terraform and Kwon said fines should be closer to $1 million, while the SEC has proposed them to pay $5.3 billion.  

The trial for Terraform against the SEC started in late March, though without Kwon. In April, a jury found that both Terraform and Kwon misled investors and were found liable for civil fraud. The main issues that the jury had to delve into revolved around the SEC's claims that Kwon and Terraform violated federal securities laws by engaging in fraud connected to the buying and selling of Terraform securities. 

The former executive has been caught in a back-and-forth between being extradited to the U.S. or South Korea. Kwon was arrested in Montenegro in March 2023 for using a counterfeit passport while attempting to exit the country.