Do Kwon Fined $4.5 Billion for Terra (LUNA) Collapse, Faces Extradition
Do Kwon, the founder of Quest Labs, faces a hefty penalty of $4.5 billion for his role in the collapse of the Terra (LUNA) and its stablecoin UST. The U.S. Securities and Exchange Commission (SEC) has labelled it 'one of the largest securities frauds in U.S. history'.
Do Kwon personally will pay around $200 million of the penalty, with the rest to be covered by Quest Labs. The penalty includes $3.5 billion in restitution, over $460 million in interest, and $420 million as a civil penalty. The collapse of Terra and UST wiped out around $40 billion in value and contributed to the failure of the FTX exchange.
The SEC has accused Do Kwon and Quest Labs of the fraud. Quest Labs is currently banned from buying or selling cryptocurrencies and tokens, including those part of the Terra ecosystem. Do Kwon's parents have been unable to clear the company's debts, which amount to $4.4 billion.
Do Kwon is currently free on bail but under restricted movement while awaiting a final verdict on his extradition to the U.S. He was previously arrested in Montenegro and sentenced to four months in prison for document forgery. South Korea has approved his extradition.
Do Kwon and Quest Labs have agreed to pay the $4.5 billion penalty to the SEC. The penalty is a significant step in addressing the damages caused by the collapse of Terra and UST. The final outcome of Do Kwon's extradition and the company's future remain to be seen.
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