Crypto leaders are slamming the SEC’s $4.47 billion settlement with Terraform Labs over last year’s $40 billion Terra investor catastrophe. They argue the deal fails to properly compensate victims.
According to recent reports, Terraform must pay $3.58 billion in money gained improperly, $420 million in penalties, and $7 million more in interest. But several top voices say those terms let Terraform off easy.
However, Coinbase’s chief legal officer Paul Grewal led the criticism, blasting the SEC on X. He noted the settlement only makes the SEC an unsecured creditor in Terraform’s bankruptcy case. Worse, Terra co-founder Do Kwon must surrender just $7 million of his own money.
“There’s zero meaningful relief to fraud victims,” Grewal stated, arguing the deal doesn’t make Terra investors whole after huge losses.
CryptoQuant’s CEO Ki Young Ju also doubted whether Terraform could actually pay the $4.47 billion given questions about its finances. And Chainlink’s Zach Rynes was upset that the funds would not go directly to affected Terra users.
The settlement awaits a judge’s approval in New York’s federal court. But as regulators try to crack down on cryptocurrency, this deal is fueling worries about whether the regulator’s actions truly prioritize protecting investors or just punishing alleged wrongdoers.
