The U.S. SEC has objected to Terraform’s $166 million retainer of Regulation Agency Dentons.
The SEC alleges that the cash was “siphoned” off into an “opaque slush fund for its legal professionals,” which might have gone to buyers and collectors.
The U.S. Securities and Trade Fee (SEC) has raised objections to a $166 million retainer fee to legal professionals of Terraform, based on Reuters.
Moreover, the SEC has mentioned that Terraform shouldn’t be allowed to rent legislation agency Dentons or pay litigation prices for workers, the report mentioned.
The SEC has alleged that Terraform meant to keep away from paying a future judgment within the SEC’s lawsuit, which is why it despatched $166 million to Dentons.
Terraform Labs and its founder, Do Kwon, at present face a trial within the U.S. from the SEC relating to the collapse of TerraUSD. Terraform Labs filed a voluntary petition in Delaware for Chapter 11 chapter in January 2024 after the failed stablecoin TerraUSD and the LUNA token collapsed in Might 2022, destroying billions of {dollars} in investor wealth.
The cash was “siphoned” off into an “opaque slush fund for its legal professionals,” which might have gone to buyers and collectors in search of to be repaid in Terraform’s chapter, the SEC mentioned, based on the report.
Terraform Labs or Dentons didn’t instantly reply to CoinDesk’s request for remark.
Learn Extra: Do Kwon Tries to Delay SEC’s Terraform Trial so He Can Attend