The US Securities and Exchange Commission (SEC) is reportedly willing to postpone the Terraform Labs trial for Do Kwon‘s extradition.
The SEC agreed to the delay of the civil trial against Terraform Labs and its co-founder Do Kwon for allegedly carrying out a $40 billion crypto-related fraud, according to a report from Reuters. This delay could be approved so that Do Kwon may be extradited and then be able to attend.
As part of a recent filing in Manhattan federal court, the SEC stated that a “modest” adjournment of the January 29 trial was justified or reasonable. This, based on statements from Kwon’s legal team that Kwon was interested in attending, agreed to extradition from Montenegro, and might be in the US by March 2024.
It was against holding separate court trials for Terraform and Kwon, explaining that the cases were essentially the same, and that two different trials may unnecessarily require whistleblowers and retail investors to testify on two separate occasions.
US District Judge Jed Rakoff is now tasked with determining if it would be okay to reschedule the trial date. The SEC has reportedy asked for April 15 of this year in order to take care of scheduling conflicts.
Kwon’s legal representative has been requesting delay until at least March 18, 2024, and on Monday stated that he will not be asking for additional adjournments even in the event that Kwon were not able to attend on the new date.
The case stems from the demise of TerraUSD, a so-called stablecoin intended to maintain a constant $1 peg and Luna, a traditional token linked with TerraUSD.
Both digital currencies have lost around $40 billion or more when TerraUSD in May 2022 was not able to hold its $1 peg.
The SEC added that Terraform and Kwon had intentionally deceived investors regarding the stability of TerraUSD and how a widely-used Korean mobile payment app used the Terraform blockchain to complete transfers.
This past month, Rakoff ruled that Terraform and Kwon had violated applicable US legal requirements by not registering TerraUSD and Luna.
Notably, Kwon is currently facing related US criminal charges and an extradition request from his home country, South Korea. He was arrested in Montenegro in March of last year.
The case is SEC v Terraform Labs Pte Ltd et al, U.S. District Court, SDNY, No. 23-01346.
