Co-Founder of Terraform Labs Summoned by SEC
The United States Securities and Exchange Commission (SEC) has summoned Do Kwon, co-founder of Terraform Labs and LUNA, for an in-person interrogation regarding the downfall of the Terra ecosystem. However, Kwon and his legal representatives have filed a petition to dismiss the request, citing impracticality and violation of due process rights.
Kwon’s Petition to Dismiss SEC’s Request
Kwon’s lawyers argue that it is logistically unfeasible for him to comply with the SEC’s timetable for a U.S.-based deposition before Oct. 13, as he is currently detained in Montenegro with no definite release or extradition schedule. They also claim that answering the SEC’s questions in writing would violate his right to due process. They are open to him being deposed in Montenegro, where he is currently out on bail.
Legal Proceedings and Allegations
In March 2023, Kwon and Terraform Labs CFO Han Chang-Joon were arrested in Montenegro for allegedly using fake travel documents. The SEC had accused them of “multi-billion dollar crypto asset securities fraud.” The Anchor Protocol, which offered a 20% yield on deposits of TerraUSD (UST), is at the center of this legal dispute. Other allegations include deceiving investors about the stability of Terra’s stablecoin.
Hot Take: Do Kwon Fights Against SEC Interrogation
Do Kwon, co-founder of Terraform Labs and LUNA, is resisting an in-person interrogation by the SEC due to logistical challenges and potential violation of his rights. His legal representatives have filed a petition to dismiss the request, arguing that complying with the SEC’s timetable is impractical as Kwon is currently detained in Montenegro. They propose a deposition in Montenegro instead. This legal battle stems from the SEC’s accusations of “multi-billion dollar crypto asset securities fraud” against Terraform Labs and Kwon, with allegations involving the Anchor Protocol and deception of investors. Kwon’s lawyers assert that his right to due process should be respected while addressing the SEC’s inquiries.
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