SEC Agrees to Commence Trial for Do Kwon Post-Extradition to the US
15th Jan, 2024
The SEC has agreed to a request from Do Kwon's legal team to potentially postpone the trial date but has opposed severing his case from Terraform's.
In a filing on January 15 in the U.S. District Court for the Southern District of New York, the SEC expressed its readiness to proceed with the trial against Kwon, scheduled to start on January 29. However, it joined a request to delay the trial start date to no earlier than March 18. Kwon's legal team is grappling with the extradition challenges as he remains in Montenegro, where he was arrested in March 2023.
The SEC, in its filing, stated, "The SEC joins in Kwon’s request for a modest adjournment so that he may participate in the trial." The SEC respectfully suggested that if the trial date is adjourned, it should commence on April 15, 2024.
Kwon's lawyers had sent a letter to Judge Jed Rakoff on January 11, seeking a delay in the January trial until Kwon could participate in his defense in person. They cited slower-than-expected extradition proceedings since Kwon's detention in Montenegro.
While the SEC agreed to potentially postpone the trial date, it opposed separating Kwon's case from Terraform's. Both were named as defendants when the SEC filed charges in February 2023, alleging their involvement in a "multi-billion dollar crypto asset securities fraud" related to TerraUSD (UST) and Terra (LUNA).
The SEC argued against holding two trials, stating that it would unnecessarily require witnesses, including SEC whistleblowers and retail investors, to testify twice about identical facts in different trials.
Terra faced a significant event in May 2022, leading to a crypto market downturn. TerraUSD depegged from the U.S. dollar, and several crypto firms, including Voyager Digital, BlockFi, Celsius Network, and FTX, later filed for bankruptcy. Despite Kwon's absence for in-person participation, pre-trial motions for the SEC case have been progressing. In December, Judge Rakoff granted summary judgment in favor of the SEC over Terraform's dealing with unregistered securities and in favor of Kwon and Terraform for the offer and sale of security-based swaps.