Updated January 17th, 2024 at 17:34 IST
Do Kwon extradition hinders US SEC trial against Terraform Labs
The SEC's civil case revolves around the collapse of TerraUSD, a stablecoin intended to maintain a constant $1 value.
A US federal judge has decided to postpone the trial involving Terraform Labs and co-founder Do Kwon, who are accused of a $40 billion cryptocurrency fraud, following a request for extradition. US District Judge Jed Rakoff in Manhattan rescheduled the trial from January 29 to March 25, considering the extradition process of Kwon from Montenegro, where he is currently held. Despite Kwon's agreement to extradition, Judge Rakoff underlined the lack of an absolute guarantee regarding his timely release. The judge acknowledged the need to accommodate the counsel's request, recognising that further postponement of the trial was not feasible.
The US Securities and Exchange Commission (SEC) had also concurred with the delay. The SEC's civil case revolves around the collapse of TerraUSD, a stablecoin intended to maintain a constant $1 value, and the traditional token Luna, closely associated with TerraUSD. The failure of TerraUSD in May 2022 resulted in both cryptocurrencies losing an estimated $40 billion or more. The SEC alleges that Terraform and Kwon misled investors about the stability of TerraUSD and how a popular Korean mobile payment app utilised the Terraform blockchain for transaction settlements.
Do Kwon has been in custody in Montenegro since his arrest in March, facing not only SEC charges but also related US criminal charges and an extradition request from his home country, South Korea. In the previous month, Judge Rakoff ruled that Terraform and Kwon violated US law by neglecting to register TerraUSD and Luna.
(With Reuters inputs)
Published January 17th, 2024 at 17:34 IST