Terra Founder Do Kwon’s SEC Trial to Start Without Him Amid Extradition Delay

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Jai Pratap

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Jai Pratap

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Jai serves as the Asia Desk Editor for Cryptonews.com, where he leads a diverse team of international reporters. Jai has over five years of experience covering the web3 industry.

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February 27, 2024

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Do Kwon, co-founder of Terraform Labs, is expected to miss the beginning of his US Securities and Exchange Commission (SEC) trial on fraud charges due to delays in his extradition from Montenegro. The trial which was set to begin last month was postponed to March 25 on Kwon’s request.

The SEC filed a lawsuit against Terraform Labs and its founders in February 2023, citing their alleged involvement in the May 2022 collapse of the TerraUSD (UST) and Luna (LUNA) cryptocurrencies. Authorities estimate this event caused roughly $40 billion in losses throughout crypto markets.

Do Kwon Not Seeking Postponement of Trial Date

Kwon’s lawyer, David Patton, filed a letter in federal court in Manhattan stating that Kwon would not request a postponement of the trial date, regardless of when the extradition process is finalized, reported Reuters.

The SEC alleges that Terraform Labs and Kwon misled investors regarding the stability of UST, a stablecoin designed to maintain a consistent $1 price.

Additionally, the lawsuit claims misrepresentation concerning how a popular Korean mobile payment app used the Terraform blockchain for transaction settlements.

Terra founder maintains his innocence and faces separate U.S. criminal charges. He has been detained in Montenegro since his arrest in March 2023.

Do Kwon Extradited to US over South Korea

As reported earlier, a court in Podgorica, Montenegro, ruled in favor of extraditing Kwon to the United States, surpassing his preferred extradition to his native South Korea.

However, Terra founder is appealing the ruling, with his local lawyer Goran Rodic claiming it was based on “inaccurate information” concerning the arrival sequence of extradition requests.

Kwon’s lawyer had earlier claimed that as per the constitution, Kwon should be extradited to South Korea and not the USA.

In an attached statement to Patton’s letter, Rodic expressed his belief that Kwon’s extradition wouldn’t occur before March’s end due to “unforeseen errors” made during the Montenegrin court proceedings.

Previously, in December 2023, U.S. District Judge Jed Rakoff, overseeing the SEC case, concluded that Terraform Labs and its founder had violated US law by failing to register UST and LUNA.