Terraform founder Do Kwon seeks delay in SEC trial

abdelaziz Fathi

The legal team representing Do Hyeong Kwon, the co-founder and former chief of Terraform Labs, has filed a request to postpone the upcoming Securities and Exchange Commission (SEC) trial against him.

Terraform founder Do Kwon

This request, mentioned in a recent court filing first reported by Inner City Press, cites potential delays in Kwon’s extradition as the primary reason.

Kwon’s legal team noted in the filing that his extradition to the United States is unlikely to occur before February or March. They argue that an adjournment of the trial until mid-March would realistically allow Kwon to be present. In the event that this request is denied, Kwon’s defense plans to ask the court to inform the jury about his absence and inability to testify in a manner that won’t unfairly prejudice the case against him.

The legal proceedings against Kwon have been ongoing since last year. In December, an appeals court in Montenegro overturned an earlier decision to extradite Kwon to South Korea and the U.S. The SEC trial against him and Terraform Labs is currently scheduled for January 29.

The SEC has charged Terraform Labs and Kwon with orchestrating a “multi-billion dollar crypto asset securities fraud,” particularly focusing on the collapse of the algorithmic stablecoin TerraUSD in May 2022. South Korean prosecutors have leveled similar accusations against Kwon and Terraform affiliates.

Kwon was arrested in March last year at an airport in Montenegro for attempting to travel with forged documents. Kwon, who is the founder of Terraform Labs, testified that he believed the passports were legitimate​​​​.

Many enforcement authorities and financial regulators, as well as the Interpol, were already on the hunt for Kwon for his alleged involvement in the collapse of terraUSD (UST) stablecoin and the Terra ecosystem.

LUNA tanked to virtually zero in a couple of hours after having peaked close to $120 with a market cap of more than $18.5 billion. Additionally, its sister stablecoin TerraUSD, or UST, lost its dollar peg before the collapse.

Globally, investors in TerraUSD and Luna lost an estimated $42 billion. Worse still, the meltdown has shaken confidence in the broader cryptocurrency industry and led to the failure of several major crypto companies including crypto lender Celsius and crypto fund manager Three Arrows Capital.

The turmoil also set off a domino effect, triggering industry-wide bankruptcies that peaked with the collapse of the world’s second largest crypto exchange, which was part of the disgraced FTX Sam Bankman-Fried’s crypto empire.

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