The U.S. Securities and Exchange Commission (SEC) has reached an agreement with Terraform Labs to delay the civil trial involving Do Kwon and his former company, due to ongoing extradition proceedings.
As reported by Reuters, the SEC has filed a recent court motion in Manhattan federal court, requesting a modest extension of the original trial date set for January 29, which pertains to Terraform Labs and its co-founder, Do Kwon.
This request aligns with Kwon’s legal team’s statements that he is prepared to attend the trial, has agreed to extradition from Montenegro, and expects to be in the United States by mid-March.
The SEC has proposed a new trial date of April 15 to accommodate scheduling conflicts and ensure Kwon’s participation in the legal proceedings.
Do Kwon Appeals Extradition Decision
Do Kwon has recently lodged an appeal against the Montenegro High Court’s ruling, which upheld extradition requests from both the United States and South Korea.
Kwon’s legal team has voiced concerns regarding potential political influences on the court’s decision, arguing that it contravenes legal provisions, the European Convention on Extradition, and the bilateral extradition treaty between the U.S. and Montenegro.
Kwon, who was detained in Montenegro last year for possessing forged official documents, is presently serving a four-month prison sentence in the country. Given that Montenegro is responsible for approving his extradition, the ongoing legal proceedings have attracted significant international attention due to the dual criminal charges Kwon faces in the United States and South Korea.
Collapse of Terraform Labs’ TerraUSD and LUNA
The legal challenges primarily arose from the $40 billion collapse of Terraform Labs’ stablecoin, TerraUSD (USTC), and its associated Terra (LUNA) token in May 2022.
TerraUSD, which was designed to maintain a steady value of $1, experienced a significant loss of value, leading to a major decline in its price. This instability had a cascading effect on Terra (LUNA), resulting in a substantial market downturn.
Subsequently, both the SEC and South Korean authorities launched investigations, suspecting fraudulent activities as the cause of these cryptocurrencies’ failure. U.S. authorities have accused Do Kwon and Terraform Labs of deceiving investors regarding the stability and security of their digital assets.
In the event of a guilty verdict, Do Kwon could face substantial penalties, including fines and potential imprisonment. The outcome of the extradition process and trial will be pivotal in determining the fate of these allegations and Kwon’s standing in the cryptocurrency industry.
