Case 1:23-cv-01346-JSR Document 271 Filed 06/12/24 Page 1 of 11

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORKSECURITIES AND EXCHANGE COMMISSION,Plaintiff,v.

No. 1:23-cv-1346 (JSR)

TERRAFORM LABS PTE LTD. andDO HYEONG KWON,Defendants.

[PROPOSED] FINAL JUDGMENT AGAINST DEFENDANTSTERRAFORM LABS PTE LTD. AND DO HYEONG KWON
Plaintiff Securities and Exchange Commission (“SEC”) filed a Complaint on February
16, 2023, and an Amended Complaint on March 31, 2023, against Defendants Terraform Labs
Pte Ltd. (“Terraform”) and Do Hyeong Kwon (“Kwon”) (collectively “Defendants”). Dkt Nos.
1, 24. The SEC alleged, among other things, that Defendants engaged in unregistered offers andsales of securities in violation of Sections 5(a) and 5(c) of the Securities Act of 1933 (“SecuritiesAct”) [15. U.S.C. §§ 77e(a) and 77e(c)], violations of the anti-fraud provisions of Section 10(b)of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5
thereunder [17 C.F.R. §240.10b-5] and Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)],and that Kwon was liable, as a control person of Terraform, for Terraform’s violations of Section
10(b) of the Exchange Act and Rule 10b-5 thereunder.
On December 28, 2023, the Court granted the SEC’s Motion for Summary Judgment andfound that Defendants engaged in unregistered offers and sales of securities in violation ofSecurities Act Sections 5(a) and 5(c) [15. U.S.C. §§ 77e(a) and 77e(c)], and granted Defendants’
Motion for Summary Judgment as to the SEC’s claims alleging that Defendants engaged inCase 1:23-cv-01346-JSR Document 271 Filed 06/12/24 Page 2 of 11

transactions in security-based swaps in violation of Securities Act Section 5(e) [15 U.S.C. §77e(e)] and Exchange Act Section 6(l) [15 U.S.C. § 78f(1)]. Dkt. No. 149.
On April 5, 2024, a unanimous jury reached a verdict finding Defendants liable forviolating the anti-fraud provisions of Exchange Act Section 10(b) [15 U.S.C. § 78j(b)], Rule10b-5 thereunder [17 C.F.R. § 240.10b-5] and Securities Act Section 17(a) [15 U.S.C. § 77q(a)],and that Kwon was liable, as a control person of Terraform, for Terraform’s violations of Section
10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b5]. Dkt. No. 229.
Defendants having entered a general appearance; consented to the Court’s jurisdiction
over Defendants and the subject matter of this action; consented to entry of this Final Judgment;
waived findings of fact and conclusions of law; and waived any right to appeal from this FinalJudgment.
I.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendants arepermanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of theExchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. §240.10b-5], by using any means or instrumentality of interstate commerce, or of the mails, or ofany facility of any national securities exchange, in connection with the purchase or sale of any
security:(a) to employ any device, scheme, or artifice to defraud;(b) to make any untrue statement of a material fact or to omit to state a material factnecessary in order to make the statements made, in the light of the circumstances under which
they were made, not misleading; or2

Case 1:23-cv-01346-JSR Document 271 Filed 06/12/24 Page 3 of 11(c) to engage in any act, practice, or course of business which operates or would operate
as a fraud or deceit upon any person.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided inFederal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who
receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendants’
officers, agents, servants, employees, and attorneys; and (b) other persons in active concert orparticipation with Defendants or with anyone described in (a).
II.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that
Defendants are permanently restrained and enjoined from violating Section 17(a) of theSecurities Act [15 U.S.C. § 77q(a)] in the offer or sale of any security by the use of any means orinstruments of transportation or communication in interstate commerce or by use of the mails,
directly or indirectly:(a) to employ any device, scheme, or artifice to defraud;(b) to obtain money or property by means of any untrue statement of a material fact or
any omission of a material fact necessary in order to make the statements made, in light of thecircumstances under which they were made, not misleading; or(c) to engage in any transaction, practice, or course of business which operates or wouldoperate as a fraud or deceit upon the purchaser.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided inFederal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who
receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendants’
officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or3

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participation with them or with anyone described in (a).
III.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that
Defendants are permanently restrained and enjoined from violating Section 5 of the Securities
Act [15 U.S.C. § 77e] by, directly or indirectly, in the absence of any applicable exemption:(a)Unless a registration statement is in effect as to a security, making use of anymeans or instruments of transportation or communication in interstate commerce or of the mails
to sell such security through the use or medium of any prospectus or otherwise;(b)

Unless a registration statement is in effect as to a security, carrying or causing to

be carried through the mails or in interstate commerce, by any means or instruments oftransportation, any such security for the purpose of sale or for delivery after sale; or(c)Making use of any means or instruments of transportation or communication ininterstate commerce or of the mails to offer to sell or offer to buy through the use or medium ofany prospectus or otherwise any security, unless a registration statement has been filed with theCommission as to such security, or while the registration statement is the subject of a refusal
order or stop order or (prior to the effective date of the registration statement) any publicproceeding or examination under Section 8 of the Securities Act [15 U.S.C. § 77h].
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided inFederal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who
receive actual notice of this Final Judgment by personal service or otherwise: (a) the above
defendants’ officers, agents, servants, employees, and attorneys; and (b) other persons in active
concert or participation with the above defendants or with anyone described in (a).

4Case 1:23-cv-01346-JSR Document 271 Filed 06/12/24 Page 5 of 11IV.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, pursuant toSection 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(5)], Defendants are permanently
restrained and enjoined from: (i) participating, directly or indirectly, in the purchase, offer, orsale of any crypto asset securities, including but not limited to UST, MIR, LUNA, wLUNA, andLUNA 2.0 or (ii) engaging in activities for purposes of inducing or attempting to induce thepurchase, offer, or sale of any crypto asset securities by others.
Notwithstanding the foregoing, as part of Terraform’s orderly wind-down and liquidationin the case, In re: Terraform Labs Pte. Ltd., No. 24-10070 (BLS) (Bankr. D. Del.) (the“Bankruptcy Case”), Defendants shall be permitted to allow third parties to withdraw, unwind
and/or unstake their positions from Terraform’s applications and protocols; and the Defendants,or the liquidating trustee or other estate representative in the Bankruptcy Case, shall be permitted
to dispose of crypto assets within the bankruptcy estate’s possession or control, including thecrypto assets transferred to the bankruptcy estate’s possession, custody, or control by Defendant
Kwon pursuant to the terms of ¶ VII hereto, other than UST, MIR, LUNA, wLUNA, ANC,KRTC, and LUNA 2.0 (the “Terraform Crypto Assets”), in a manner not objectionable to theparties and the court in the Bankruptcy Action. Defendants shall otherwise burn or destroy
private keys in Terraform’s possession to wallets or blockchain addresses holding Terraform
Crypto Assets, including those tokens after they are received from the Luna Foundation Guardpursuant to the transfers contemplated by the terms of ¶ VII hereto, and to burn any vested
LUNA 2.0 tokens.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided inFederal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who5

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receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendants’
officers, agents, servants, employees, and attorneys; and (b) other persons in active concert orparticipation with Defendants or with anyone described in (a).
V.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, pursuant toSection 21(d)(2) and Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(2) and (d)(5)]and Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)], Kwon is permanently prohibitedfrom acting as an officer or director of any issuer that has a class of securities registered pursuant
to Section 12 of the Exchange Act [15 U.S.C. § 78l] or that is required to file reports pursuant toSection 15(d) of the Exchange Act [15 U.S.C. § 78o(d)].
VI.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Terraform is liablefor disgorgement totaling $3,586,875,883, which represents net profits gained as a result of theconduct alleged in the Complaint, together with prejudgment interest thereon in the amount of$466,952,423. Of these amounts, Kwon is jointly and severally liable with Terraform in theamount of $110,000,000 of disgorgement, plus prejudgment interest thereon in the amount of$14,320,196.
Pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3)of the Exchange Act [15 U.S.C. § 78u(d)(3)], the Court further imposes a civil penalty on
Terraform of $420,000,000. The $4,473,828,306 in total monetary remedies against Terraformshall be payable as provided for in the confirmed Chapter 11 Plan in the Bankruptcy Case, as set
forth in the following paragraph.
Terraform agrees to seek approval of the Chapter 11 Plan which provides, in such plan6

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or the corresponding confirmation order, that such disgorgement and civil penalty shall betreated as an allowed general unsecured claim of the Commission against Terraform in theBankruptcy Case, in the amount of $4,473,828,306, which shall be deemed satisfied upon a
distribution by the liquidating trustee or other estate representative to creditors and investors
pursuant to a confirmed liquidating Chapter 11 plan that incorporates the terms set forth in
Exhibit 1 to Terraform’s Consent or on substantially similar terms that are not objectionable tothe Commission. For the avoidance of doubt, if the allowed claims, including any applicableinterest, of creditors (including any harmed investors) are satisfied in full under the Chapter 11plan, distributions shall be made on account of the Commission’s claims until paid in full before
any distribution is made to any equity holder of Terraform. Terraform shall use its best efforts toconfirm such a plan by September 30, 2024. If no such plan has gone effective by October 30,
2024, the Commission may enforce this Court’s judgment against Terraform. Disgorgement andcivil penalties owed to the SEC by Kwon will not be deemed satisfied by a distribution in theBankruptcy Case.
Defendants agree that they shall not seek or accept, directly or indirectly, reimbursement
or indemnification from any source, including but not limited to payment made pursuant to any
insurance policy, with regard to any civil penalty amounts that Defendants pay pursuant to theFinal Judgment, regardless of whether such penalty amounts or any part thereof are added to adistribution fund or otherwise used for the benefit of investors. Defendants further agree thatthey shall not claim, assert, or apply for a tax deduction or tax credit with regard to any federal,state, or local tax for any penalty amounts that Defendants pay pursuant to the Final Judgment,
regardless of whether such penalty amounts or any part thereof are added to a distribution fundor otherwise used for the benefit of investors.

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Case 1:23-cv-01346-JSR Document 271 Filed 06/12/24 Page 8 of 11VII.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Kwon is liable fordisgorgement totaling $110,000,000, together with prejudgment interest thereon in the amount of$14,320,196. Pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section
21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)], the Court further imposes a civil penalty
on Kwon of $80,000,000. Kwon shall begin to satisfy these obligations by directly transferringto the bankruptcy estate in the Bankruptcy Case, assets and funds as set forth in the next
paragraph herein.
Payment of the monetary remedies against Kwon shall be deemed satisfied, provided that
all transfers by Kwon to the SEC and the Terraform bankruptcy estate in the Bankruptcy Case
total no less than $204,320,196, excluding the value of any Terraform Crypto Assets transferredto the Terraform bankruptcy estate, only if and until Kwon completes: (1) transferring into anescrow account agreed by Kwon and the Commission staff $4,700,000 within 30 days of Final
Judgment as set for the above; (2) transferring into an escrow account agreed by Kwon and theCommission staff $2,300,000 of assets belonging to Kwon in accounts at Sygnum Bank ofZurich, Switzerland, associated with Portfolio Number 84.002.088-00, within 30 days of Final
Judgment; (3) transferring to the Terraform bankruptcy estate in the Bankruptcy Case within 30days all crypto assets of the Luna Foundation Guard, which shall first be applied to satisfy thedisgorgement amount and prejudgment interest with any remaining assets applied to the civil
penalty amount; and (4) transferring to the Terraform bankruptcy estate in the Bankruptcy Casewith 30 days Kwon’s ownership interest in all PYTH tokens Kwon obtained pursuant to the May
18, 2021 Token Grant Agreement between Kwon and Tribal Invest Corp, which shall be applied
to satisfy the civil penalty amount.

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The assets transferred by Kwon to the Liquidating Trust shall be distributed to harmed
investors pursuant to the confirmed chapter 11 plan. The $7,000,000 transferred by Kwon into
escrow shall be transferred to the Liquidating Trust upon the plan effective date. Kwon shallremit any balance outstanding after the effective date of the plan (i) directly to the Liquidating
Trust for so long as the Liquidating Trust is in existence; and (ii) directly to the Commission if
the Liquidating Trust is no longer in existence.
The Commission may enforce the Court’s judgment for disgorgement and prejudgmentinterest against Kwon by using all collection procedures authorized by law, including, but notlimited to, moving for civil contempt at any time after 30 days following entry of this Final
Judgment if Mr. Kwon has not completed the foregoing transfers to Terraform bankruptcy estatein the Bankruptcy Case by that date.
The Commission may enforce the Court’s judgment for penalties against Kwon by theuse of all collection procedures authorized by law, including the Federal Debt Collection
Procedures Act, 28 U.S.C. § 3001 et seq., and moving for civil contempt for the violation of any
Court orders issued in this action. Kwon shall pay post judgment interest on any amounts due
after 30 days of the entry of this Final Judgment pursuant to 28 U.S.C. § 1961. The Commission
shall hold the funds, together with any interest and income earned thereon (collectively, the“Fund”), pending further order of the Court.
The Commission may propose a plan to distribute the Fund subject to the Court’sapproval. Such a plan may provide that the Fund shall be distributed pursuant to the Fair Fund
provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002. The Court shall retain
jurisdiction over the administration of any distribution of the Fund and the Fund may only bedisbursed pursuant to an Order of the Court.

9Case 1:23-cv-01346-JSR Document 271 Filed 06/12/24 Page 10 of 11Regardless of whether any such Fair Fund distribution is made, amounts ordered to bepaid as civil penalties pursuant to this Judgment shall be treated as penalties paid to thegovernment for all purposes, including all tax purposes. To preserve the deterrent effect of thecivil penalty, Kwon shall not, after offset or reduction of any award of compensatory damages in
any Related Investor Action based on Kwon’s payments of disgorgement in this action, argue
that he is entitled to, nor shall he further benefit by, offset or reduction of such compensatory
damages award by the amount of any part of Kwon’s payment of a civil penalty in this action(“Penalty Offset”). If the court in any Related Investor Action grants such a Penalty Offset,
Kwon shall, within 30 days after entry of a final order granting the Penalty Offset, notify theCommission’s counsel in this action and pay the amount of the Penalty Offset to the UnitedStates Treasury or to a Fair Fund, as the Commission directs. Such a payment shall not be
deemed an additional civil penalty and shall not be deemed to change the amount of the civil
penalty imposed in this Judgment. For purposes of this paragraph, a “Related Investor Action”
means a private damages action brought against Kwon by or on behalf of one or more investors
based on substantially the same facts as alleged in the Complaint in this action.
VIII.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, for purposes of
exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. §523, any
debt for disgorgement, prejudgment interest, civil penalty or other amounts due by Kwon under
this Final Judgment or any other judgment, order, consent order, decree or settlement agreement
entered in connection with this proceeding, is a debt for the violation by Kwon of the federal
securities laws or any regulation or order issued under such laws, as set forth in Section
523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19).

10Case 1:23-cv-01346-JSR Document 271 Filed 06/12/24 Page 11 of 11IX.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, for purposes ofpurposes of exceptions to discharge set forth in 11 U.S.C. § 1141(d)(6), any debt fordisgorgement, prejudgment interest, civil penalty or other amounts due by Terraform under theFinal Judgment or any other judgment, order, consent order, decree or settlement agreement
entered in connection with this proceeding, is a debt of a kind specified in paragraph (2)(A) or(2)(B) of 11 U.S.C. § 523(a) that is owed to the SEC, a domestic governmental unit.
X.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED all parties haveknowingly and voluntarily consented to waive the right, if any, to appeal from the entry of thisFinal Judgment.
XI.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shallretain jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment.

Dated: ______________, 2024____________________________________
Hon. Jed S. Rakoff
UNITED STATES DISTRICT JUDGE11