SEC Can Seek Assistance from South Korean Government in Interviewing Daniel Shin and Do Kwon: US Judge

A United States Judge Rules SEC Can Seek Assistance from South Korean Government

A United States judge has ruled that the Securities and Exchange Commission (SEC) can seek assistance from the South Korean government in interviewing Daniel Shin, co-founder of Terraform Labs, along with Do Kwon.

Key Points:

US District Judge Jed Rakoff ruled that the SEC can utilize a procedure outlined in a 1970 treaty to request international evidence-gathering assistance.
Do Kwon did not contest the SEC’s request despite denying any misconduct.
The SEC intends to obtain evidence from Chai Corp., the payments company founded by Kwon.
The SEC is seeking to validate accusations made in a lawsuit against Terraform and its former CEO.
The lawsuit accuses TFL and Kwon of orchestrating a multi-billion dollar crypto asset securities fraud.

The relationship between Chai and Terra is a contentious issue, with reports suggesting Kwon may have misrepresented the partnership. The SEC alleges that Chai Payments did not use the Terraform blockchain as agreed in their 2019 partnership deal, instead deceptively replicating payments on the blockchain. Kwon is also facing criminal charges in the US and South Korea, claiming they are politically motivated.

Hot Take:

This ruling allows the SEC to gather evidence from South Korea to support their allegations of fraud against Terraform Labs and its co-founder. It raises questions about the relationship between Terra and Chai, as well as the integrity of the Terraform blockchain. Kwon’s denial of misconduct and claims of political motivation add further complexity to the case.