Terra Founder Do Kwon’s Absence at SEC Trial Due to Extradition Delay

Do Kwon Delays SEC Trial Due to Extradition Issues

Do Kwon, co-founder of Terraform Labs, is facing delays in his extradition from Montenegro, resulting in the postponement of his US Securities and Exchange Commission (SEC) trial on fraud charges. The trial, originally scheduled to begin last month, has been rescheduled to March 25 as per Kwon’s request.

SEC Lawsuit Against Terraform Labs

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 in May 2022, causing an estimated $40 billion in losses across crypto markets. The lawsuit accuses Terraform Labs and Kwon of misleading investors about the stability of UST, a stablecoin designed to maintain a consistent $1 price. It also claims misrepresentation regarding the use of the Terraform blockchain for transaction settlements in a popular Korean mobile payment app.

Kwon’s Legal Proceedings

Kwon’s lawyer, David Patton, has indicated that Kwon is not seeking a postponement of the trial date, regardless of the status of his extradition. Despite facing separate U.S. criminal charges, Kwon maintains his innocence and has been detained in Montenegro since his arrest in March 2023.

A court in Podgorica, Montenegro, ruled in favor of extraditing Kwon to the United States, overriding his preference for extradition to South Korea. However, Kwon is appealing the ruling, claiming it was based on “inaccurate information” regarding the sequence of extradition requests. His local lawyer, Goran Rodic, expressed the belief that Kwon’s extradition may be delayed due to unforeseen errors in the Montenegrin court proceedings.

Conclusion

In December 2023, U.S. District Judge Jed Rakoff concluded that Terraform Labs and its founder had violated US law by failing to register UST and LUNA, further complicating Kwon’s legal situation.