The United States Securities and Exchange Commission (SEC) has concurred with a request from the legal team of Do Kwon, co-founder of Terraform Labs, to delay the start of their trial until after Kwon's extradition to the U.S. This agreement, filed in the U.S. District Court for the Southern District of New York on January 15, suggests postponing the trial start date to no earlier than March 18, with the SEC proposing April 15, 2024, as a new commencement date.
Kwon, currently in Montenegro following his arrest in March 2023, faces legal challenges relating to his extradition to the U.S. His lawyers had requested the delay on January 11, citing the slower-than-expected extradition proceedings.
The SEC, while agreeing to delay the trial, opposed separating Kwon's case from Terraform's case. Both Kwon and Terraform Labs were charged by the SEC in February 2023 for orchestrating a "multi-billion dollar crypto asset securities fraud" involving tokens formerly known as TerraUSD (UST) and LUNA.
This move by the SEC to join in the postponement request acknowledges the complexities surrounding Kwon's extradition and the ongoing legal procedures. The Terra ecosystem, which collapsed in May 2022, played a significant role in the 2022 crypto market downturn. The depegging of TerraUSD from the U.S. dollar had far-reaching impacts, leading to the bankruptcy of several crypto firms, including Voyager Digital, BlockFi, Celsius Network, and FTX.
Pretrial motions for the SEC case against Terraform have been advancing, with Judge Jed Rakoff granting a summary judgment in favor of the SEC over Terraform's handling of unregistered securities and in favor of Kwon and Terraform for the offer and sale of security-based swaps.
This case represents a significant moment in the regulation and oversight of the cryptocurrency market, particularly in addressing alleged fraud and misconduct within the industry.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.
