SEC and Do Kwon's Legal Team Seek Delay in Crypto Fraud Trial Amid Extradition Proceedings
Summary:
The U.S. Securities and Exchange Commission (SEC) and Do Kwon's attorneys have jointly sought to delay the commencement of his trial until after his extradition from Montenegro. Initially slated for January 29, they proposed no sooner than March 18 for the trial start date. The SEC opposed the proposal to separate Kwon's case from Terraform's, both facing charges of a multi-billion dollar crypto asset securities fraud. Despite the lack of Kwon's personal presence, the SEC's pre-trial proceedings are progressing, with the judge ruling in favor of the SEC against Terraform concerning unregistered securities.
The U.S. Securities and Exchange Commission (SEC), in an unexpected move, has united with Do Kwon's attorneys in lobbying for a delay in the commencement of the trial against the Terraform Labs co-founder until after his extradition. According to a document filed on January 15 at the U.S. District Court in the Southern District of New York, the litigators of the SEC were fully set to go forward with Kwon's trial scheduled for January 29; nevertheless, they concurred with a request to postpone the trial date to no earlier than March 18. Kwon's legal practitioners are currently working through the procedural complications of extradition from Montenegro, where Kwon is currently held under arrest since March 2023. The SEC echoed Kwon's call for a moderate adjournment for his active participation and respectfully asked that the trial start by April 15, 2024, if there is at all any adjournment.
Kwon's attorneys, on January 11, wrote to Judge Jed Rakoff asking to delay the trial until Kwon could physically attend the courts and contribute to his defense. The attorneys opined that the extradition procedures initiated post Kwon's arrest in Montenegro were proceeding at a slower pace than anticipated.
Although the SEC agreed on the potential deferral of the trial, it took objection to separating Kwon's case from the Terraform case. The SEC had earlier charged both Kwon and Terraform in February 2023, accusing them of coordinating a "multi-billion dollar crypto asset securities fraud" connected to former tokens TerraUSD (UST) and Terra (LUNA). The SEC asserted that conducting two separate trials would obligate witnesses, including SEC informants and retail investors with restricted economic resources, to give their statements twice about the same facts.
Following its collapse in May 2022, Terra became a prominent case amid the crypto market crash that year. TerraUSD lost its pegging to the U.S. dollar, leading many other crypto firms to file for bankruptcy, such as Voyager Digital, BlockFi, Celsius Network, and FTX.
In the absence of Kwon's personal involvement, the pace with the SEC case's pre-trial protocols has been sustained. In December, Judge Rakoff allocated a summary judgment supporting the SEC against Terraform concerning unregistered securities, while favoring Kwon and Terraform concerning the proposition and sale of security-related swaps.
Published At
1/15/2024 11:17:34 PM
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