In a serious announcement on Wednesday, Terraform Labs said that they’d be paying almost $4.5 billion so as to settle the SEC lawsuit. However, many in the crypto group have began elevating doubts about how the bankrupt Terraform Labs with solely $75 million in belongings beneath administration plan to pay such a large quantity in fines.
From Where Will Terraform Labs Bring $4.5 Billion?
CryptoQuant founder Ki Young Ju not too long ago questioned the supply of such a big sum of settlement by Terraform Labs which is equal to 64,824 Bitcoin. He questioned whether or not this sum was really used to revive the UST peg whereas expressing suspicion over the transaction.
“Where does this money come from? Did they actually use it to restore the peg? Sus,” Ki Young Ju said on X platform. He additional said that the $4.47 billion cash-out is implausible, even when Terraform’s market cap is $40 billion whereas including that neither Do Kwon nor Terraform Labs ought to possess such a considerable quantity of funds. As reported by CoinGape, Coinbase CLO Paul Grewal additionally raised doubts over the SEC settlement.
On the different hand, Terraform Labs has solely $75 million value of belongings of their “known” pockets. So the query stays the place will it deliver the further $3.75 billion?
So #Terraform solely have $75m in belongings of their “known” wallets – the place is the $3.75b stability of this #SEC high-quality coming from? 👀 pic.twitter.com/vqcbeGMgte
— MartyParty (@martypartymusic) June 12, 2024
David Hoffman, the co-founder of Bankless and Ethereum contributor said: “If Terraform Labs ACTUALLY has $4.5B in assets… and if it ACTUALLY is paid as a fine to the U.S. SEC, instead of the users who lost it…. it’ll be one of the craziest examples of agency corruption in our lifetimes”.
What’s the Truth Behind the $4.5 Billion SEC Settlement?
Note that the present settlement with Terraform Labs entails disgorgement to the bankrupt property as an alternative of any direct fee to the SEC. The judgment consists of $4.05 billion in disgorgement along with curiosity and a $420 million civil high-quality.
Considering Terra’s chapter submitting in January, they’re unlikely to pay a lot of the complete settlement quantity. Rather, it is going to be handled as an unsecured declare in the Chapter 11 liquidation course of.
Terra founder Do Kwon has additionally agreed to a ban on crypto transactions and shall switch $204 million to Terraform’s chapter property.
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