Critical SEC Developments for these 2 Altcoins: Statements Have Been Made!

The US Securities and Exchange Commission (SEC) announced that Terraform Labs and its founder, Do Kwon, have agreed to pay a fine of over $4.5 billion following a unanimous decision by the jury. This decision goes down in history as one of the largest fraud penalties in the cryptocurrency industry. Meanwhile, there was also an SEC development for Ripple, the company behind the altcoin XRP. Here are the details...

Fraud charges against Terraform Labs and Do Kwon

As reported by Kriptokoin.com, Do Kwon, the founder of Terraform Labs, has been in hot waters for some time. The jury found Terraform Labs and Kwon responsible for a years-long fraud scheme involving the LUNA and UST crypto asset securities. The fraud scheme resulted in significant investor losses when it was uncovered. The nine-day jury trial in April revealed that the defendants carried out their plans by misleading the Terraform blockchain and deceiving investors about the stability of UST.

As of May 2022, with UST's decoupling from the US dollar, the prices of UST and other tokens of Terraform almost plummeted to zero. This situation caused approximately 40 billion dollars in losses for investors. The fraud also victimized many individual investors who had invested their life savings in the Terraform ecosystem.

Statement from SEC Chairman Gensler on Terraform

SEC Chairman Gary Gensler said the following about the case:

This case confirms what the court has said time and again: It is the economic realities of a product, not labels, speculation or exaggeration, that determine whether a product is a security. The Terraform and Kwon fraudulent activities have caused devastating losses for investors and in some cases wiped out their entire life savings. 01928374656574839201

As part of the agreement, Terraform:

• Compensation amounting to 3,586,875,883 dollars
• 466.952.423 dollars in reserve interest
• A legal penalty amounting to $420,000,000

accepted the payment. The company also agreed to stop selling crypto asset securities, terminate its operations, dismiss two executives, and distribute the remaining assets in Terraform's ongoing bankruptcy case to investor victims and creditors through a liquidation plan subject to court approval.

There is also a SEC development for Ripple Labs, one of the leading altcoin companies

Terraform Labs’ penalty echoed in Ripple Labs’ ongoing case with the SEC. Ripple's lawyers argued that the proposed $2 billion fine is disproportionate, citing the Terraform Labs-SEC settlement as an example. They claimed that a fair penalty for the company should be around $10 million.

In the long-running SEC-Ripple case, the final decision is expected to come in July. Ripple CEO Brad Garlinghouse stated that in the event of a negative outcome, XRP could be considered a security in the US and most investors would not be able to trade XRP on most crypto trading platforms. These developments are considered a significant turning point for the cryptocurrency market. Tighter regulations and deterrent measures are expected to be discussed in the areas of fraud and investor protection.

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