Gary Gensler is at it again. His agency, the Securities and Exchange Commission, asked a federal judge to approve a settlement that requires TerraForm and its criminal founder, Do Kwon, to pay $4.47 billion to resolve civil charges related to the collapse of the scammy UST stablecoin. In a letter to the court, the SEC declares, “The entry of this judgment would ensure the maximal return of funds to harmed investors and put TerraForm out of business for good.”
This sounds great, but for one thing: TerraForm is bankrupt and has little or no money, while it’s unclear if Kwon has anything close to the $204 million portion of the judgment he owes, or if he will even turn up in these parts again. The most recent reports have him locked up in some Balkan jail, waiting to find out if he will be extradited to the U.S. or his native South Korea, where Kwon fleeced many of his countrymen. Best of luck to the SEC collecting anything.
An uncharacteristically shoddy report by Bloomberg states that TerraForm “will pay $4.47 billion,” but the reality, in the words of the Wall Street Journal, “The regulator may end up receiving only a fraction, if any, of the penalty.” Nonetheless, Gensler’s SEC is making a song and dance in court, no doubt with plans to put out a press release that touts the billions of dollars TerraForm “will pay.”
This is rich considering Do Kwon’s swindle happened on Gensler’s watch, and the SEC failed to stop it. Meanwhile, the $4.5 billion settlement must be a cold comfort to investors burned by TerraForm’s collapse. For them, it must feel akin to having the police stand by while your house gets robbed and, after your possessions are gone and the proceeds spent, announcing the thief must pay a big sum of money you will never receive.
What exactly is the point of all this? Presumably, it’s to give Gensler another splashy headline to celebrate his failing war on the crypto industry. Just imagine if the SEC chair put this sort of energy into building a workable digital asset regime instead.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
DECENTRALIZED NEWS
Hamster Kombat, a “tap to earn” game within the Telegram app that has 31 million followers, and others like it could open the door to mainstream crypto gaming. (Bloomberg)
Stablecoin maker Paxos cut 20% of its workforce, despite being in a strong financial position, and now has 200 to 300 employees. (The Block)
The head of the U.K.'s National Health Service called for action to address crypto trading addiction among young people. (Cointelegraph)
Bitcoin's two-day rally was snuffed out by news the Fed plans to conduct just one rate cut this year. (CoinDesk)
An unconfirmed report that the Biden campaign may accept crypto contributions has the usual suspects raging over the president's alleged hypocrisy. (X)
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