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LUNA Token Surges Over 15% as Do Kwon’s Terraform Labs Reaches Settlement with SEC Over $40 Billion Crypto Collapse

Last Updated May 31, 2024 10:32 AM
Eddie Mitchell
Last Updated May 31, 2024 10:32 AM
Key Takeaways
  • Terraform Labs has reached an interim settlement with the SEC.
  • The Terra (LUNA) and Luna Classic (LUNC) tokens have risen in price following the announcement.
  • Do Kwon remains in Montenegro and is awaiting extradition to South Korea or the U.S.

Terraform Labs and its founder Do Kwon have reached a preliminary settlement with the U.S. Securities and Exchange Commission (SEC) following accusations of fraud and misleading investors.

Both LUNA and LUNC saw their prices jump over 15$ and 10% following the news, though these gains were momentary, they were significant for two defacto deadcoins.

Settlement Agreed?

As per Reuters , Terraform Labs and Do Kwon have reached a “settlement in principle” with the SEC after the regulator charged  the firm with defrauding investors in 2023.

According to the SEC’s estimates, investors lost over $40 billion combined when the collapse of TerraUSD stablecoin’s $1 peg dropped, causing Luna (now Luna Classic) to also collapse with it.

As per reports, SEC filings show that the regulator is seeking to reclaim $5.3 billion in TerraUSD proceeds from Kwon and Terraform labs. The SEC is also seeking to fine Terraform Labs $420 million, as well as a further $100 million for Kwon, who argue that they should only pay $3.5 million and less than $1 million, respectively.

LUNA and LUNC Price

Following the announcement, the Terra (LUNA ) token spiked some 38%  from around $0.59 to just over $0.81, the highest price the token had reached since December 2023.

TradingView chart displaying LUNA/USD price.
(Source: TradingView)

Traders were seemingly eager to offload their LUNA tokens at the $0.81 mark, bringing the price back down to around $0.68. Terraform Labs’ original token Terra Classic (LUNC), also saw similar price action.

TradingView chart displaying LUNC/USD price.
(Source: TradingView)

LUNC climbed  some 12% peaking at just over $0.00013, the highest it’s been since October 2023. The price action appears to mirror that of LUNA, with LUNC now trading sideways after shedding around half of its gains.

Kwon on Bail

Kwon is presently on supervised release and stuck in extradition limbo, where he has been sent back and forth between jails, immigration camps, and properties around Montenegro. It is unclear whether or not Kwon will be extradited at all as a previous appeal by his lawyers was granted by the Court of Appeal in Montenegro.

Whilst the Montenegro High Court determines whether or not a century-old  extradition policy is still applicable, Kwon continues to deny the allegations and awaits extradition to either the U.S. or South Korea.

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