With a hearing scheduled for May 22 to listen to proposed remedies in the United States Securities and Exchange Commission’s (SEC’s) case against Terraform Labs (TFL) and co-founder Do Kwon, the crypto firm has argued for a substantially different judgment than that proposed by the regulator.

In a supplement to Terraform’s opposition to the SEC’s motion for final judgment filed on May 1, lawyers representing the crypto firm argued the financial regulator was not entitled to $5.3 billion in disgorgement, interest and civil penalties following a jury finding TFL and Kwon liable for fraud. Terraform built on its previously asserted claims that any disgorgement would effectively have to be obtained from the Luna Foundation Guard (LFG), a “non-party” in the civil case.

According to lawyers for Terraform, the SEC had “no evidence” that the platform’s or Kwon’s activities in the U.S. caused the losses at the center of the civil case. If the commission were to claim disgorgement and civil penalties, according to Terraform, it would give the regulatory a “territorially unlimited injunction.”

“TFL’s offers and sales of tokens occurred almost entirely outside the U.S. [...] and the SEC has submitted no evidence that Defendants’ limited activities in the U.S. directly caused any losses, much less the billions the SEC seeks in disgorgement,” said the May 1 filing.

Related: Do Kwon’s Terraform Labs files for Chapter 11 bankruptcy protection

In an April 26 filing, Terraform claimed that $1 million in civil penalties would be “far more appropriate” than the SEC’s multibillion-dollar proposal. Kwon, who is currently in Montenegro awaiting extradition to either the U.S. or South Korea, opposed the SEC’s proposed remedies to the civil case on similar grounds to Terraform:

“[T]he SEC must still establish that Mr. Kwon engaged in conduct within the United States or conduct without the United States that had a ‘foreseeable substantial effect’ in the United States,” said lawyers for the Terraform co-founder. “Mr. Kwon’s role in the conduct that forms the basis of the SEC’s requested judgment was performed entirely abroad, in Korea and Singapore.”

A jury found Terraform and Kwon liable for defrauding investors after a two-week trial with the SEC. All parties are scheduled to present arguments for proposed remedies before Judge Jed Rakoff on May 22. However, it was unclear at the time of publication whether Kwon would be available due to his legal situation in Montenegro.

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