Terraform Labs lawyers propose a maximum fine of $1 million in the SEC lawsuit without recovery

ChainCatcher news, according to Cointelegraph, Terraform Labs' attorneys filed a motion opposing the U.S. Securities and Exchange Commission (SEC)'s request for $5.3 billion in disgorgement and civil penalties against Terraform Labs and its co-founder Do Kwon. In a document submitted to the U.S. District Court for the Southern District of New York on April 26, Terraform's legal team suggested that the court impose a maximum civil penalty of $1 million. Terraform argued that the court "should not grant any injunctive relief or disgorgement" because the funds must actually be obtained from the Luna Foundation Guard (LFG), which is a "non-party" to the civil case. Terraform also stated that a $1 million civil penalty is "far more appropriate" than the SEC's billions of dollars in penalties.

On April 5, a New York jury found that Terraform and Do Kwon had allegedly deceived investors in the sale statements of TerraUSD (UST), Luna, and wLUNA. Subsequently, the SEC filed a motion seeking the disgorgement of $5.3 billion in illegal profits and civil penalties. Additionally, the SEC proposed to ban Do Kwon from serving as an executive or director of any securities issuer and to provide detailed information about his accounts and assets.