TL;DR
- Do Kwon, co-founder of Terraform Labs, faces trial for alleged fraud before the US SEC due to the cryptocurrency crash in May 2022.
- Delays in extradition from Montenegro could cause the accused to miss the start of his trial scheduled for March.
- Kwon denies the accusations and appeals the extradition decision, while his lawyer cites errors in the judicial process in Montenegro.
Cryptocurrency entrepreneur Do Kwon, co-founder of Terraform Labs, faces a civil trial before the United States Securities and Exchange Commission (SEC) for alleged fraud.
However, due to delays in his extradition from Montenegro, the accused will likely not be present at the start of his trial scheduled for March 25, according to his lawyer David Patton.
Kwon and Terraform Labs were sued by the SEC in February last year over the May 2022 collapse of the TerraUSD and Luna cryptocurrencies, which caused an estimated $40 billion in losses in the cryptocurrency markets.
The SEC accuses Terraform and Kwon of misleading investors about the stability of TerraUSD, a stablecoin designed to maintain a constant price of $1, as well as the use of the Terraform blockchain by a popular Korean mobile payment app to settle transactions.
Despite the allegations, Kwon has denied any wrongdoing and faces related criminal charges in the United States, where he has been detained in Montenegro since his arrest in March last year.
Recently, a court in Montenegro ruled that Do Kwon should be extradited to the United States instead of his native South Korea
Do Kwon is appealing this decision, arguing that it was based on “erroneous” information about the sequence of arrival of extradition requests.
His local lawyer, Goran Rodic, mentioned that the judicial process in Montenegro has been prolonged due to “numerous unanticipated errors” made by the court.
Kwon’s extradition is not expected to take place before the end of March, according to Rodic.
In December, United States District Judge Jed Rakoff, who is overseeing the SEC case, ruled that Terraform and Kwon violated US law by failing to register TerraUSD and Luna.
This trial is a crucial point in the case facing Kwon and Terraform Labs, which has generated great attention in the world of cryptocurrencies and the legal field related to them.
