<p style="text-align: justify">You can also read this news on BH NEWS: <a href="https://en.bitcoinhaber.net/sec-objects-to-terraform-labs-legal-expenses-and-employee-lawsuit-coverage">SEC Objects to Terraform Labs’ Legal Expenses and Employee Lawsuit Coverage</a><br></p>
<p style="text-align: justify">A recent report by Reuters has revealed that the US Securities and Exchange Commission (SEC) is taking issue with Terraform Labs’ hiring of the Dentons law firm for a hefty $166 million fee. Furthermore, the SEC is contesting the company’s decision to fund its employees’ legal costs. The regulatory body suspects that the funds for these expenditures come from an opaque source, potentially involving bribery.</p> 
<h2 id="legal-spending-comes-under-regulatory-scrutiny">Legal Spending Comes Under Regulatory Scrutiny</h2> 
<p style="text-align: justify">The SEC’s criticisms focus on what it deems an excessive amount allocated to legal services by Terraform, suggesting that the funds should instead go to investors and creditors affected by the firm’s financial turmoil. This opposition from the regulator emerges during an ongoing dispute with Terraform Labs and its CEO Do Kwon after the much-publicized failure of the TerraUSD stablecoin and the LUNA token in May 2022.</p> 
<p style="text-align: justify">Terraform Labs’ recent financial maneuvers, including the proposal to engage Dentons and cover its employees’ legal costs, have prompted the SEC to voice its objections, underscoring the regulator’s role in overseeing corporate financial practices during litigation and bankruptcy proceedings.</p> 
<h2 id="bankruptcy-adds-to-terraform-labs-troubles">Bankruptcy Adds to Terraform Labs’ Troubles</h2> 
<p style="text-align: justify">In the backdrop of this controversy, Terraform Labs filed for Chapter 11 bankruptcy in Delaware in January 2024, attributing their financial downfall to the collapse of TerraUSD and LUNA. This filing signaled considerable losses for the company’s investors.</p> 
<p style="text-align: justify">The SEC alleges Terraform Labs’ hefty payment to Dentons as a tactic to circumvent liabilities from the lawsuit, depriving investors and creditors of possible restitution amid the firm’s insolvency. These objections add another layer of complexity to the legal challenges confronting Terraform Labs and Do Kwon, with the outcome of these proceedings still in flux.</p> 
<h5><span style="font-weight:bold;font-size:16px">The post first appeared on BH NEWS: </span> <a href="https://en.bitcoinhaber.net/sec-objects-to-terraform-labs-legal-expenses-and-employee-lawsuit-coverage">SEC Objects to Terraform Labs’ Legal Expenses and Employee Lawsuit Coverage</a></h5>

SEC Objects to Terraform Labs’ Legal Expenses and Employee Lawsuit Coverage

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