Delay in SEC Trial Against Terraform Labs and Co-Founder Do Kwon

Delay in SEC Trial Against Terraform Labs and Co-Founder Do Kwon

The U.S. Securities and Exchange Commission (SEC) has agreed to postpone the trial against Terraform Labs and its former top executive, Do Kwon. The delay is justified as Kwon intends to attend the trial and is currently in the process of being extradited from Montenegro. Originally scheduled for January 29, the trial has been rescheduled to April 15.

Do Kwon, the co-founder of Terraform Labs, has agreed to extradition from Montenegro and is expected to arrive in the U.S. by mid-March. His lawyers initially requested a trial delay to March 18, which is nearly a month earlier than the trial date proposed by the SEC. However, they also stated that they would not seek further adjournments if Kwon is unable to attend.

Although both parties have reached an agreement, Judge Jed Rakoff, who presides over the case, still needs to decide whether to grant the trial delay request. In addition, the SEC has expressed its opposition to holding separate trials for Terraform Labs and Kwon. They argue that the cases are similar, and conducting two separate trials would result in repetitive testimony.

Source of Information

Reuters reported the trial delay based on a court filing that is not publicly available at the moment. Neither the SEC nor Terraform Labs have provided any comments regarding the rescheduling.

In February 2023, the SEC charged Terraform Labs with fraud amounting to billions of dollars. The case is still ongoing; however, in December, a judge issued summary judgments in favor of Terra and the SEC on two separate issues.

Do Kwon is currently serving a prison sentence in Montenegro for passport fraud. His sentence is expected to end on February 15, indicating that he could potentially be released before his extradition for the upcoming trial.

The SEC has agreed to a delay in the trial against Terraform Labs and its co-founder Do Kwon, allowing Kwon to attend the trial after his extradition from Montenegro. The trial, originally scheduled for January 29, has been postponed to April 15. The judge overseeing the case will make the final decision on granting the trial delay request. The SEC has expressed its opposition to separate trials for Terraform Labs and Kwon, citing their similarities. As the case continues, Do Kwon’s prison sentence for passport fraud in Montenegro is expected to end before his extradition.

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