TL;DR

• Yesterday, Terraform Labs and its former CEO, Do Kwon, agreed to settle their SEC fraud case…for $4.5 billion.

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Yesterday, Terraform Labs and its former CEO, Do Kwon, agreed to settle their SEC fraud case…for ~$4.5 billion.

In May, a Manhattan jury found that Kwon and Terraform Labs misled investors about the success and stability of the Terra blockchain before it imploded, leaving investors $40B in the hole.

Of the $4.5B owed, Kwon is personally liable to pay $204 million, which the SEC said would “send an unmistakable deterrent message.”

But here’s the thing:

It makes sense that the company might have $4.3B in treasury assets (i.e. $4.3B worth of BTC, ETH, gold, USD or something else of value).

And that a bankruptcy estate currently has control over whatever assets they do have and will be able to pay that back.

But it raises two big questions…

Firstly, shouldn’t that money be going back to investors directly?

Maybe the ultimate plan is for the SEC to distribute it giving investors ~$0.10 on the dollar.

Secondly, how in the heck does Do Kwon have $204M?

(It’s not like you can work in a Montenegro McDonalds and make that kind of cash in a year).

If Do Kwon comes up with the cash (which is required within 30 days), it seriously makes you wonder how many more crypto assets he has.

Sounds like justice - but we’re as confused as you are.