Montenegro's Justice Ministry Discusses SEC's Fraud Investigation into Terraform Labs Co-Founder
Summary:
Montenegro's Justice Minister, Andrej Milović, discussed the investigation into Terraform Labs co-founder Do Kwon with the U.S. Securities and Exchange Commission (SEC). Kwon remains in Montenegro amidst extradition requests from the U.S. and South Korea, following his arrest for fraudulent travel documentation. The SEC is pushing for Do Kwon and Terraform to pay around $5.3 billion after being found guilty of fraud. Terraform had collapsed in 2022 due to the instability of its cryptocurrency, and filed for bankruptcy with up to $500 million in liabilities and assets.
The Montenegrin government has confirmed that Andrej Milović, the Minister of Justice, held discussions about the investigation into Terraform Labs co-founder Do Kwon with representatives of the United States Securities and Exchange Commission (SEC).The update from the government on May 22 stated that Milović had attended a meeting with SEC authorities, which included Gurbir Grewal, the Director of Enforcement.The essence of the talks focused on the SEC's legal action against Kwon, who along with Terraform was held accountable for fraudulent activities in April. At the moment, Kwon remains in Montenegro while the nation's legal system evaluates extradition appeals from both the U.S. and South Korea. He was taken into custody in March 2023 for possessing counterfeit travel documentation and was given a four-month jail sentence. Although Kwon is permitted to roam around Montenegro post-release, his legal reps have lodged numerous appeals which have stalled his extradition. Pending the outcome of the court, Milović may ultimately be the person to decide if the co-founder of Terraform will be extradited to the U.S. or South Korea.
Relatedly: In the introductory arguments for the civil trial, SEC described Terra as a 'fragile structure'.
Back in the states, a judicial officer is set to evaluate the redress sought by Terraform and Kwon on May 29 after they were convicted for fraud. The SEC suggests that the co-founder, together with Terraform, pays approximately $5.3 billion considering disgorgement, previous interest, and civil penalties.
Terraform went under in 2022 due to the volatility of its algorithm-backed stablecoin, TerraUSD (UST). In January, the company filed for insolvency in the U.S. court citing an estimated debt and assets worth up to $500 million.
In magazine news: the SEC is bracing itself for a powerful legal standoff against the crypto sector in 'Godzilla vs. Kong'.
Published At
5/23/2024 7:25:02 PM
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