SEC and Terraform Labs Lawyers Clash Over Whistleblower Evidence
In a court hearing, lawyers representing the United States Securities and Exchange Commission (SEC) and Terraform Labs co-founder Do Kwon engaged in a heated debate over information provided by a whistleblower in the securities lawsuit. The SEC accused Terra and Kwon of committing fraud with the LUNA token, citing evidence from an unnamed whistleblower. However, Kwon’s legal team argued that the SEC was inconsistent in its claims regarding the depegging of TerraUSD (UST) from the U.S. dollar. The lawyers also mentioned that the whistleblower withheld some recordings.
Confidential Filings May Not Remain Confidential
The arguments took place in the U.S. District Court for the Southern District of New York, where Judge Jed Rakoff suggested that confidential filings would not remain sealed if the case proceeded to trial. The judge had previously approved certain materials filed by Jump Crypto under confidential treatment. Jump Crypto is under investigation for its alleged involvement in the UST depegging events.
Possible Extradition for Do Kwon
Do Kwon, who was arrested for using falsified travel documents in Montenegro earlier this year, could face extradition to either the U.S. or South Korea depending on court approval. In addition to the SEC civil case, Kwon has been charged with eight criminal counts related to fraud at Terraform Labs by the U.S. Attorney’s Office.
Upcoming Legal Proceedings
If motions for summary judgment are denied, the SEC case against Terra and Kwon is set to begin in January 2024. Former FTX CEO Sam Bankman-Fried’s sentencing is scheduled for March 2024, while former Celsius CEO Alex Mashinsky’s trial is expected in September 2024 in the same district.
Hot Take: SEC and Terraform Labs Clash Over Whistleblower Evidence in Court Hearing
In a recent court hearing, lawyers representing the SEC and Terraform Labs sparred over the credibility of evidence provided by an unnamed whistleblower. The SEC accused Terra and co-founder Do Kwon of committing fraud, while Kwon’s legal team argued inconsistencies in the SEC’s claims. The judge suggested that confidential filings may not remain sealed if the case proceeds to trial. Do Kwon, who could face extradition, has also been charged with multiple criminal counts related to fraud. With upcoming legal proceedings for Terra, Kwon, and other industry figures, the outcome of these cases will have significant implications for the crypto community.
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