Terraform claims SEC offered ‘no evidence’ for $4.7B in disgorgement

Lawyers for the firm claimed that any alleged losses caused by the platform’s or Do Kwon’s actions happened outside the United States, beyond the SEC’s authority in the civil case.

With a hearing scheduled for May 22 to listen to proposed remedies in the United States Securities and Exchange Commission’s (SEC’s) case against Terraform Labs (TFL) and co-founder Do Kwon, the crypto firm has argued for a substantially different judgment than that proposed by the regulator.

In a supplement to Terraform’s opposition to the SEC’s motion for final judgment filed on May 1, lawyers representing the crypto firm argued the financial regulator was not entitled to $5.3 billion in disgorgement, interest and civil penalties following a jury finding TFL and Kwon liable for fraud. Terraform built on its previously asserted claims that any disgorgement would effectively have to be obtained from the Luna Foundation Guard (LFG), a “non-party” in the civil case.

According to lawyers for Terraform, the SEC had “no evidence” that the platform’s or Kwon’s activities in the U.S. caused the losses at the center of the civil case. If the commission were to claim disgorgement and civil penalties, according to Terraform, it would give the regulatory a “territorially unlimited injunction.”

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