The United States Securities and Exchange Commission (SEC) joined a request from lawyers representing Do Kwon to have its trial start after the Terraform Labs co-founder’s extradition.
In a Jan. 15 filing in U.S. District Court for the Southern District of New York, the SEC said it was “fully prepared, willing, and able to proceed” with a trial against Kwon scheduled to begin on Jan. 29, but joined a request to push the start date no earlier than March 18. Kwon’s legal team is dealing with the legal challenges of extradition to the U.S. while the Terraform Labs co-founder is in Montenegro, where he was arrested in March 2023.
“The SEC joins in Kwon’s request for a modest adjournment so that he may participate in the trial,” said the filing. “If the trial date is adjourned, the SEC respectfully requests that trial commence on April 15, 2024.”
Kwon’s lawyers sent a letter to Judge Jed Rakoff on Jan. 11, requesting the January trial be delayed until the Terraform co-founder could participate in his defense in person. The legal team suggested that the extradition proceedings, which began after Kwon was detained in Montenegro, had been moving more slowly than it expected.
Though the SEC agreed with the request to potentially postpone the trial date, it opposed severing Kwon’s case with the commission with Terraform’s. Both were named as defendants when the SEC filed charges in February 2023, alleging the two orchestrated a “multi-billion dollar crypto asset securities fraud” related to the tokens formerly called TerraUSD (UST) and Terra (LUNA).
“Holding two trials would unnecessarily require witnesses, including SEC whistleblowers and retail investors with limited financial means, to testify twice about identical facts in different trials,” said the SEC.
Related: Terra co-founder Do Kwon will stay in Montenegro until February: Report
Terra collapsed in May 2022, which many considered a significant event in that year’s crypto market downturn. TerraUSD depegged from the U.S. dollar, and many crypto firms later filed for bankruptcy, including Voyager Digital, BlockFi, Celsius Network, and FTX.
Even without Kwon available to participate in person, pre-trial motions for the SEC case have been moving forward. In December, Judge Rakoff granted summary judgment in favor of the SEC over Terraform dealing with unregistered securities and in favor of Kwon and Terraform for the offer and sale of security-based swaps.
Magazine: US enforcement agencies are turning up the heat on crypto-related crime