Terraform Labs Founder Urges Court to Dismiss SEC’s Request for Questioning
Do Kwon, the founder of Terraform Labs, has filed a court document urging a federal court to dismiss the U.S. Securities and Exchange Commission’s (SEC) request to question him regarding the crash of his company’s tokens, Terra and Luna. Kwon’s legal team argues that it is impossible for him to be present in the U.S. as he is currently detained in Montenegro. They also claim that providing written testimony would violate his due process rights under U.S. law.
SEC Seeks Expedited Questioning
The SEC has requested an expedited questioning of Do Kwon before the discovery cut-off date. However, Kwon’s legal team opposes this proposal, stating that it serves no practical purpose and undermines judicial authority.
Lawsuit Against Terraform Labs
In February, the SEC filed a lawsuit against Terraform Labs, accusing the company of providing false information to investors about the security of its TerraUSD stablecoin. The lawsuit alleges that the defendants breached registration and anti-fraud provisions outlined in securities laws.
The Crash and Market Impact
The crash of TerraUSD and Luna in May 2022 resulted in a $60 billion loss in Terra’s ecosystem market value and had significant repercussions throughout the cryptocurrency market. It caused a decline in Bitcoin’s price and wiped out $300 billion in value across the entire sector.
Hot Take: Do Kwon Fights Back Against SEC’s Request for Questioning
Do Kwon, the founder of Terraform Labs, is pushing back against the SEC’s request to question him regarding the crash of his company’s tokens. His legal team argues that it is impossible for Kwon to be present in the U.S. due to his detention in Montenegro and that providing written testimony would infringe upon his due process rights. The SEC seeks expedited questioning, but Kwon’s team believes it serves no practical purpose and undermines judicial authority. This ongoing legal battle highlights the challenges faced by regulators in governing cryptocurrencies and the significant market impact of such cases.
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