The U.S. Securities and Exchange Commission (SEC) has filed in agreement with Terraform Labs to postpone the civil trial against Do Kwon and his former company, amid ongoing extradition proceedings.
According to Reuters, in its recent court filing in Manhattan federal court, the SEC has requested a modest postponement of the originally scheduled January 29 trial involving Terraform Labs and its co-founder Do Kwon.
This request aligns with Kwon’s lawyer’s assertions that he is willing to attend the trial, has consented to extradition from Montenegro, and anticipates being in the United States by mid-March.
The proposed new trial date, suggested by the SEC, is April 15, to account for scheduling conflicts and to facilitate Kwon’s participation in the proceedings.
Do Kwon Appeals Extradition Decision
Do Kwon has recently filed an appeal against the Montenegro High Court’s decision to uphold extradition requests from both the United States and South Korea.
Kwon’s legal team has raised concerns about potential political pressures on the court, claiming the decision violates legal provisions and the European Convention on Extradition, as well as the bilateral treaty with the U.S. regarding extradition.
Kwon, who was arrested in Montenegro last year for possessing falsified official documents, is currently serving a four-month prison sentence in the country. As Montenegro is responsible for approving his extradition, the ongoing legal proceedings are drawing significant international attention due to the dual criminal charges Kwon faces in the U.S. and South Korea.
Collapse of Terraform Labs’ TerraUSD and LUNA
The legal challenges primarily stemmed from the $40 billion collapse of Terraform Labs’ stablecoin TerraUSD (USTC) and its associated Terra (LUNA) token in May 2022.
TerraUSD, the stablecoin designed to maintain a constant price of $1, failed to do so, leading to a drastic drop in its value. This destabilization had a domino effect on Terra (LUNA), causing a significant market crash.
The SEC and South Korean authorities subsequently initiated investigations, suspecting fraudulent activities behind the failure of these cryptocurrencies. U.S. authorities have accused Kwon and Terraform Labs of misleading investors about the stability and safety of their digital assets.
If found guilty, Kwon could face substantial penalties, including fines and potential imprisonment. The extradition process and trial are critical in determining the outcome of these allegations and Kwon’s future in the crypto industry.