SEC approves postponement of Terraform case pending extradition of Kwon Do-do

• It has been reported that the lawsuit between the U.S. Securities and Exchange Commission (SEC) and Terraform Labs has been postponed until March.

• The SEC also urged the court to halt the proceedings, arguing that the two separate trials were similar.

According to the latest report, the court adjourned the case between the U.S. Securities and Exchange Commission and Terraform Labs. The delay is reportedly to allow authorities to extradite Terraform’s Kwon Do-do from Montenegro. This means the clinical trial will take place in March 2024.

Reuters reported that the case was originally scheduled to be heard on January 29, but the agency requested a “reasonable” postponement because it believed it was unlikely the defendant would appear in court. It is reported that Mr. Kwon agreed to extradition and expressed his intention to attend the trial.

Interestingly, U.S. District Judge Jed Rakoff in Manhattan said there is still no guarantee that Kwon will be released on time. For this reason the trial will no longer be adjourned if he fails to appear.

Kwon said he agreed to extradition from Montenegro, where he is currently detained, but there is no guarantee he will be released in time. Nevertheless, the court clearly acknowledged that the trial could no longer be postponed and plans to accept the defense’s request.

More about the SEC and the Terraform case

Two separate trials were planned for this case, but the SEC opposed them, saying the cases were similar. According to them, two separate trials could pave the way for the whistleblower and individual investors to testify twice.

The SEC sued Terraform and Kwon in February 2023, demanding high-yield Anchor Protocol and LUNA token securities.

Terraform and Kwon also misled investors about one of the most important aspects of Terraform’s product: the stability of UST, an algorithmic ‘stablecoin’ purportedly pegged to the U.S. dollar. If the price of UST falls below the $1.00 ‘peg’ and is not restored quickly by the algorithm, it will spell doom for the entire Terraform ecosystem, given that UST and LUNA have no asset reserves or other support.

Mr. Kwon was arrested at Podgorica Airport, and a search revealed that he had a Costa Rican passport. He was sentenced to four months in prison in Montenegro. However, South Korea and the United States are engaged in a fierce battle over his extradition.

Mr. Kwon is accused of eight crimes in the United States, including ‘securities, raw materials, and financial fraud.’ He also faced civil charges from the SEC in April 2018 and May 2022 for allegedly orchestrating cryptocurrency fraud that resulted in significant losses. In both the United States and South Korea, he has been accused of cryptocurrency fraud that created a market value of $40 billion. Loss.

David Lesperance, legal cryptocurrency expert, talks about the extradition process.

It’s a long process. In some cases, extradition may be accomplished solely through an agreement between the two governments. It’s a long process that allows for appeals etc and for this reason the government often tries to avoid extradition…all we do is kick him out! He does not work, has no status here, is not a citizen of Montenegro, is not a resident, and has no status as a visitor. Now my job with him is over. Now we’re trying to kick him out.

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