SEC vs Terraform Labs Trial Postponed to March: Co-founder Kwon Requests In-Person Defense
Summary:
The United States Securities and Exchange Commission's (SEC) lawsuit against Terraform Labs has been postponed to March by a federal judge. The move comes after Do Kwon, co-founder of Terraform Labs, wanted to be available to defend himself in court. Kwon is currently detained in Montenegro facing extradition proceedings to the U.S. This development comes a year after the SEC leveled charges against the company and Kwon over alleged multi-billion dollar crypto asset securities fraud related to the tokens known as TerraUSD (UST) and Terra (LUNA).
The lawsuit brought by the United States Securities and Exchange Commission (SEC) against Terraform Labs has been postponed to March upon the request of Do Kwon, who wants to be present for his own defense, as mandated by a federal judge. In a document filed on January 16 in the U.S. District Court for the Southern District of New York, Judge Jed Rakoff delayed the commencement of the SEC v. Terraform Labs trial to March 25. The judge noted that there was no definitive assurance that Kwon would be discharged from extradition procedures in Montenegro in time for his in-person court appearance, but he accepted a plea from his legal representatives, supported by the SEC. Source: Courtlistener
Initial plans had set the trial's starting date for January 29, approximately one year after the SEC leveled accusations against Terraform and Kwon in February 2023. The allegations held that both entities perpetrated a “multi-billion dollar crypto asset securities fraud," connected to the tokens formerly recognized as TerraUSD (UST) and Terra (LUNA).
Terra's framework failed in May 2022, after which Kwon's location was mostly unknown. Kwon, co-founder of Terraform Labs, was apprehended by Montenegro authorities in March 2023 for utilizing counterfeit travel documents and was subsequently sentenced to a four-month jail term. As of now, he is still in Montenegro while extradition between the U.S. and Montenegro is ongoing.
Whether Kwon will be able to join the SEC lawsuit in person remains to be seen, yet preparations for the pretrial are progressing. In December, Judge Rakoff pronounced a decision in support of the SEC's allegation that Terraform ran unregistered securities and in favor of Kwon and Terraform regarding the proposition and selling of security-based swaps.
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Published At
1/17/2024 6:35:16 PM
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