Do Kwon, Co-founder of Terraform Labs, to Miss SEC Trial Due to Extradition Delay
Do Kwon, the co-founder of Terraform Labs, is facing delays in his extradition from Montenegro, which will cause him to miss the beginning of his trial with the US Securities and Exchange Commission (SEC). The trial was originally scheduled to start last month but has been postponed to March 25 at Kwon’s request. The SEC filed a lawsuit against Terraform Labs and its founders in February 2023, alleging their involvement in the collapse of the TerraUSD (UST) and Luna (LUNA) cryptocurrencies, resulting in approximately $40 billion in losses across crypto markets.
Kwon Will Not Seek Postponement of Trial Date
Kwon’s lawyer, David Patton, has informed the federal court in Manhattan that Kwon will not request a postponement of the trial date, regardless of when the extradition process is finalized. This decision was reported by Reuters. The SEC accuses Terraform Labs and Kwon of misleading investors about the stability of UST, a stablecoin designed to maintain a consistent $1 price. The lawsuit also alleges misrepresentation regarding the use of the Terraform blockchain for transaction settlements by a popular Korean mobile payment app.
Kwon Faces Extradition to US Instead of South Korea
A court in Podgorica, Montenegro, ruled in favor of extraditing Kwon to the United States instead of his native South Korea. However, Kwon is appealing this ruling. His local lawyer, Goran Rodic, claims that inaccurate information influenced the court’s decision regarding the sequence of extradition requests. Kwon’s lawyer had previously argued that he should be extradited to South Korea based on constitutional grounds. Rodic believes that Kwon’s extradition will not take place before the end of March due to unforeseen errors made during the Montenegrin court proceedings.
Terra Founder Previously Found to Have Violated US Law
In December 2023, U.S. District Judge Jed Rakoff, who is overseeing the SEC case, determined that Terraform Labs and its founder had violated US law by failing to register UST and LUNA. Kwon, who maintains his innocence, also faces separate criminal charges in the United States. He has been in detention in Montenegro since his arrest in March 2023.
Hot Take: Kwon’s Extradition Delay Prolongs SEC Trial
The extradition delay faced by Do Kwon, co-founder of Terraform Labs, means that he will not be present for the beginning of his SEC trial on fraud charges. This delay has further extended the legal proceedings surrounding the collapse of TerraUSD (UST) and Luna (LUNA) cryptocurrencies. As a result, the crypto community eagerly awaits the resolution of this high-profile case, which has caused significant losses in the market. The outcome of Kwon’s trial will have implications for investor trust and regulatory measures within the crypto industry. Stay tuned for updates on this ongoing legal battle.
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