Terra coins Luna and Msa rise after the news of Do Kwon Seik’s settlement

Terraform Labs and its founder Do Kwon have reached an interim settlement with the US Securities and Exchange Commission (SEC), with cryptocurrencies linked to the Terra ecosystem gaining overnight.

Terra's relaunched LUNA cryptocurrency is up 16.3% in the last 24 hours to trade at $0.69.

In an interview with the court, the parties involved in the case “informed the court that they have reached an agreement in principle” and gave a deadline of June 12 to submit documents related to the case. The details appear in the court docket because a hearing scheduled for May 29 has been canceled due to the ongoing settlement.

Investors were misled about the stability of the Terra ecosystem's algorithmic stable coin, TerraUSD (UST), in April when a New York jury agreed with the SEC that Do Kwon and Terraform Labs were liable on civil fraud charges.

While details of the interim settlement reached between the parties have not been disclosed, the SEC has sought civil financial penalties as well as an injunction barring Quon and Terraform Labs from the securities industry.

Allegations related to the May 2022 collapse of the TerraUSD and Terra LUNA management tokens, which resulted in over $40 billion in losses and a years-long “Cryto winter.”

Kwon's legal woes were only partially resolved by the settlement. Terra's founder has been indicted by the US Department of Justice (DOJ) on criminal fraud charges, as well as charges of fraud, bribery, controlling trading volume and violating capital market laws in his home country of South Korea.

In the year Following Kwon's December 2023 arrest in Montenegro on false passport charges, the US and South Korea have been locked in a months-long trial to extradite the Terra founder, with requests repeatedly granted and denied by Montenegrin courts.

Kwon, who was released from Montenegro after serving four months in prison, is required to remain in the country until his extradition.

Edited by Stacy Elliott.