Terraform Labs to Burn all Private Keys to Its Wallets as Part of $4.4B SEC Settlement

In the settlement, TFL agreed to pay the SEC $4.4 billion, and Do Kwon would pay an additional $204 million.

Terraform Labs (TFL) has agreed to burn all private keys to wallets belonging to the company as part of the proposed settlement with the U.S. Securities and Exchange Commission (SEC).

According to Chris Amani, TFL’s new CEO, the move follows a directive by the court for the “Defendants to burn or destroy private keys in Terraform’s possession to wallets or blockchain assets holding UST, MIR, LUNA, wLUNA, and LUNA 2.0.”

Amani, who took over from Kwon in July 2023, also asked the community to take over the ownership of the chain.

“TFL will fully cooperate with the court-appointed receiver to sell or dispose of all remaining products, including Pulsar Finance, Station Wallet, and Enterprise Protocol,” Amani added.

The SEC had initially charged TFL and Do Kwon in February with misleading investors and engaging in financial fraud. As part of the recent proposed settlement, Kwon can never be the director or officer of any public company.

The settlement, which is still subject to the judge’s approval, will see TFL pay $4.4 billion to the SEC, while Kwon will pay an additional $204 million.

The proposed $4.4 billion settlement includes $3.58 billion in disgorgement and a $420 million civil penalty.

Following the verdict, over 100,000,000 LUNA, valued at more than $2.5 million, was unstaked, indicating fear, uncertainty, and doubt among investors.

However, both LUNC and LUNA token prices remained relatively unaffected by the announcement.

Kwon’s settlement payment will go into a bankruptcy estate for TFL and will be used to compensate investors affected by the Terra Luna exploit.