Terra Coins LUNA and LUNC Rise After Do Kwon SEC Settlement News

Cryptocurrencies linked to the Terra ecosystem have seen gains overnight, following the news that Terraform Labs and its founder Do Kwon have reached a tentative settlement with the U.S. Securities and Exchange Commission (SEC).

Terra’s rebooted LUNA cryptocurrency is up 16.3% in the past 24 hours to trade at $0.69, while Terra Luna Classic (LUNC), the native token of the original Terra ecosystem, is up by 9.5% in the past day, trading at $0.0001215.

Per court minutes for the case, the parties involved in the case have “informed the Court that they reached a settlement in principle,” with a June 12 deadline for filing papers relating to the matter. The detail shows up on the court docket because a hearing scheduled for May 29 had been cancelled because of the ongoing settlement talks.

In April, a New York jury found that Do Kwon and Terraform Labs were liable for civil fraud charges, agreeing with the SEC that investors had been misled about the stability of the Terra ecosystem’s algorithmic stablecoin TerraUSD (UST).

While details of the tentative settlement reached between the parties haven’t been disclosed, the SEC had sought civil financial penalties as well as orders barring Kwon and Terraform Labs from the securities industry.

The charges related to the collapse of TerraUSD and Terra’s LUNA governance token in May 2022, which caused over $40 billion in losses and sparked a years-long “crypto winter.”

Kwon’s legal woes have only partly been resolved by the settlement. The Terra founder faces criminal fraud charges brought by the U.S. Department of Justice (DOJ), as well as charges of fraud, bribery, manipulating transaction volume, and violating capital markets laws in his native South Korea.

Following Kwon’s arrest in Montenegro on false passport charges in December 2023, the U.S. and South Korea have been engaged in a months-long jurisdictional battle to extradite the Terra founder, with requests repeatedly being approved and rejected by Montenegro’s courts.

Kwon, who was released from prison in Montenegro after serving a four-month sentence, is required to remain in the country pending his extradition.

Edited by Stacy Elliott.