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The US Securities and Exchange Commission (SEC) is seeking $5.3 billion from Terraform Labs and its founder Do Kwon.
$4.7 billion comes from Terraform Labs and Do Kwon's disgorgement and prejudgment interest, while additional civil penalties of $420 million and $100 million are being sought respectively.
In a motion filed on Friday with the US District Court for the Southern District of New York, the SEC also requested a ban on Do Kwon from serving as an officer or director of a securities issuer. Do Kwon must also provide details of all his accounts and assets.
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Terraform Labs would also have a “conduct-based injunction” imposed on it to prevent “engaging in essentially the same behavior that led to the massive fraud.”
Legal representatives for Terraform Labs and Do Kwon have filed briefs for a maximum civil penalty from Terraform Labs of $3.5 million and $800,000 from Do Kwon.
“Defendants have not shown remorse for their conduct, nor can there be any doubt that they are in position where additional violations are not only possible but likely are already occurring,” said the SEC filing.
“The Court should send an unequivocal message that this sort of brazen misconduct, and Defendants’ misbegotten attempt to excuse their behavior by crafting new rules and standards of behavior for crypto markets in contravention of the federal securities laws [...] will not be tolerated.”
Earlier this month, Montenegro’s Supreme Court suspended the decision made by lower-level judges to extradite Do Kwon to South Korea. Instead, Do Kwon could end up on trial in New York instead.
Do Kwon and his team had pushed for extradition to South Korea as sentences for white-collar crimes are less harsh than Montenegro seems fit. Therefore the government intends to approve extradition to the US instead.
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