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SEC Supports Do Kwon's Trial Request Following Extradition to the US

Key Takeaways
  • The SEC agrees to postpone the trial for Do Kwon, accused in a crypto securities fraud case, until April 15, 2024, citing the need for his active participation.
  • The SEC opposes the separation of Do Kwon's case from Terraform's, arguing that having two trials would burden witnesses and create unnecessary complications for whistleblowers and retail investors.
  • Legal proceedings unfold amid the collapse of the Terra ecosystem in May 2022, with the depegging of TerraUSD triggering a crypto market downturn.
16-Jan-2024 By: Sudeep Saxena
SEC Supports Do Kwon

SEC Supports Trial Delay for Do Kwon, Opposes Case Severance

The United States Securities and Exchange Commission (SEC) has agreed with lawyers representing Do Kwon to delay his trial until after his extradition. In a filing on January 15 in the U.S. District Court for the Southern District of New York, the SEC expressed its readiness for the trial originally set for January 29.

However, they supported a request to postpone the start date until at least March 18. Kwon's legal team is navigating the extradition process while he is currently in Montenegro, where he was arrested in March 2023.

The SEC stated in the filing, "The SEC supports Kwon's request for a slight delay so that he can actively participate in the trial. If the trial date is rescheduled, the SEC respectfully proposes that the trial begin on April 15, 2024."

Request for Trial Delay Due to Extradition Challenges

Do Kwon's legal team, in a letter to Judge Jed Rakoff dated January 11, sought a postponement of the January trial until Kwon could actively participate in his defense in person. They cited the slower-than-expected progress of the extradition proceedings initiated after Kwon's detention in Montenegro.

While the SEC supported the request to potentially delay the trial, it opposed the separation of Kwon's case from Terraform's case. Both were implicated as defendants when the SEC filed charges in February 2023, alleging their involvement in a "multi-billion dollar crypto asset securities fraud" related to the tokens formerly known as TerraUSD (UST) and LUNA.

The SEC argued against having two trials, stating that it would unnecessarily burden witnesses, including SEC whistleblowers and retail investors with limited financial means, who would be required to testify twice about identical facts in different trials.

The legal case has had a significant impact on Do Kwon's net worth as he grapples with various consequences stemming from the proceedings. Moreover, we have seen a lot of similarities in the cases of Sam Bankman Fried and Do Kwon.

Legal Proceedings Unfolding Amidst Terra's Downfall

The collapse of the Terra ecosystem in May 2022 marked a significant event during that year's crypto market downturn, as per Coin Gabbar. This downturn saw the depreciation of TerraUSD from the U.S. dollar, leading to a chain reaction resulting in numerous crypto firms filing for bankruptcy. Notable casualties included Voyager Digital, BlockFi, Celsius Network, and FTX.

Despite Do Kwon's absence for in-person participation, pretrial motions for the SEC case have been advancing. In December, Judge Rakoff made key rulings, granting summary judgment in favor of the SEC concerning Terraform's involvement with unregistered securities. Additionally, judgment favored Kwon and Terraform regarding the offer and sale of security-based swaps.

Also Read: BitFinex Successfully Foils Attempted 15B Dollar XRP Cyberattack

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