The US Securities and Exchange Commission (SEC) has published an information page to address numerous inquiries from investors who suffered losses due to the collapse of Terraform Labs.
This page aims to explain the compensation process following a settlement finalized in June. As part of the settlement, Terraform Labs has agreed to pay $4.47 billion, which includes $3.6 billion in disgorgement fines, a $420 million civil penalty, and approximately $467 million in prejudgment interest.
The SEC clarified that it will not collect any funds until the investors and creditors are fully compensated in the bankruptcy case.
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The information page points out that the bankruptcy plan confirmation hearing is expected in fall 2024, adding that creditors and investors will be able to review and raise objections to the plan.
Overall, the SEC's page is intended to guide investors through the compensation process, providing clarity as the bankruptcy case progresses.
The SEC sued Terraform Labs and its co-founder Do Kwon in 2023 for "orchestrating a multi-billion dollar crypto asset securities fraud," particularly naming Terra's collapsed algorithmic stablecoin TerraUSD (UST) and its governance token Terra (LUNA).
In April this year, a jury found Terraform Labs and Kwon guilty of misleading investors and held them liable for civil fraud.
