The Terraform case, involving co-founder Do Kwon, is on the brink of a delay as the U.S. Securities and Exchange Commission (SEC) shows no resistance to a postponement. This comes as Kwon awaits extradition, with the SEC open to holding off the crypto fraud trial until his return. The case revolves around the collapse of TerraLuna (LUNC) and TerraUSD (UST), which led to a loss of $40 billion in May 2022.
SEC’s Stance on the Terraform Case Delay
The SEC has given its nod to a “modest adjournment” of the Terraform case until April 15. This delay will allow for the completion of Kwon’s extradition proceedings in Montenegro. Kwon’s legal team had requested this postponement, citing the slower-than-anticipated progress of the extradition process. However, the SEC has objected to separating Kwon’s case from that of Terraform’s, as both were named defendants when the charges were filed in February 2023.
The charges levied against them involved their alleged participation in a “multi-billion dollar crypto asset securities fraud” related to the formerly TerraUSD (UST) and LUNA tokens. The SEC’s argument against separating the cases is based on the unnecessary burden it would place on witnesses, including agency whistleblowers and retail investors, who would have to testify twice about the same facts in different trials.
Kwon’s Legal Challenges Continue
Kwon, once a tech billionaire, is reportedly appealing a Montenegro High Court ruling that upheld extradition requests from his native South Korea and the United States. His legal team contends that the High Court’s decision overlooks a bilateral extradition treaty with the U.S. and the European Convention on Extradition. Despite winning an appeal against the extradition requests in November, the High Court in Podgorica, where he was arrested, reinstated its ruling in December.
Kwon and Terraform have been accused of misleading users and investors about the stability of UST, a stablecoin pegged to the U.S. dollar. The failure of UST to maintain its promised $1 price led to a collapse within Terra’s ecosystem, resulting in bankruptcies and marking the onset of the crypto winter of 2022.
The Consequences of the Terraform Case
In a recent ruling, Judge Jed Rakoff determined that Terraform and Kwon violated U.S. law by not registering TerraUSD and Luna. In addition to the charges in the U.S., Kwon also faces an extradition request from South Korea.
As the Terraform Case Delay Amid Extradition continues to unfold, it’s essential to stay informed about the latest developments in the cryptocurrency world. Platforms like cryptoview.io offer a comprehensive view of the crypto market, ensuring that you’re always up to speed.
