Coinbase’s Chief Legal Officer, Paul Grewal, has criticized the Securities and Exchange Commission’s (SEC) $4.47 billion settlement with Do Kwon and the now-bankrupt Terraform Labs.
Grewal raised concerns about the settlement’s ability to offer practical solutions to Terraform’s victims.
Coinbase CLO Questions SEC Settlement with Kwon
Paul Grewal expressed his doubts on the effectiveness of the settlement on X (formerly Twitter) and criticized the SEC for the way they approached the case. He noted that the settlement only requires the SEC to be treated as an unsecured creditor in Terraform’s bankruptcy case and makes Kwon surrender only $7 million of his assets.
It’s predictably on-brand to tout a settlement with Kwon and the now-bankrupt Terraform totaling $4.7 billion. But the settlement just makes the SEC an unsecured creditor in the BK and only orders Kwon to hand over $7 million of assets he actually has. There’s zero meaningful… https://t.co/x4AFd8gPXs
— paulgrewal.eth (@iampaulgrewal) June 12, 2024
Moreover, according to Grewal, this does not go a long way in providing adequate compensation to the victims of Terraform’s fraudulent practices that saw many lose money.
Piling on the conversation, other influential personalities in the crypto space have shared similar opinions. Ki Young Ju, CEO of CryptoQuant, stated that it was unrealistic for Terraform Labs to possess such funds for the settlement, raising doubts about the legitimacy of their financial activities. Ki’s comments, as a result, give a perspective into the general suspicion within the crypto space about Terraform Labs’ transparency and moral standards.
Terraform Labs to Pay $4.47B to Settle SEC Charges
The settlement agreement requires Terraform Labs to pay the SEC $3.58 billion in disgorgement and $420 million in civil penalties. This comes after a jury in April ruled that Do Kwon and his firm had defrauded investors in their cryptocurrency products.
The case which is being presided over by Judge Jed Rakoff of the U. S. District Court for the Southern District of New York, has come to a crucial decision by filing the settlement terms.
Assuming Terraform Labs actually has $4.47 billion to pay… why is that capital going to a soulless government agency vs being used to compensate Terra’s victims?
Is this what ‘protecting investors’ is supposed to look like? If so, I’d like to opt out, thanks https://t.co/nvSdJqnU2i
— Zach Rynes | CLG (@ChainLinkGod) June 12, 2024
However, the crypto community and industry leaders are worried about how the settlement funds will be distributed and where they will end up. Zach Rynes, a community liaison at Chainlink, also expressed discontent with the fact that the settlement will be paid to the SEC instead of the affected people of Terra’s collapse.
This criticism, consequently, can be associated with the emerging discourse concerning the necessity of increasing the focus of regulatory measures on investor protection and the return of stolen funds.
Read Also: Bitcoin Short-term Investment Hits New Highs with ETF Popularity
The post Coinbase CLO Criticizes SEC Settlement with Kwon, Terraform appeared first on CoinGape.
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