US SEC willing to delay Terraform Labs trial for Do Kwon’s extradition By Reuters

© Reuters. FILE PHOTO: The seal of the U.S. Securities and Trade Fee (SEC) is seen at its headquarters in Washington, D.C., U.S., Could 12, 2021. REUTERS/Andrew Kelly/File Photograph

By Jonathan Stempel

NEW YORK (Reuters) – The U.S. Securities and Trade Fee agreed to delay a civil trial towards Terraform Labs and co-founder Do Kwon for allegedly orchestrating a $40 billion cryptocurrency fraud, in order that Kwon will be extradited and attend.

In a Monday submitting in Manhattan federal court docket, the SEC mentioned a “modest” adjournment of the Jan. 29 trial was justified, based mostly on statements from Kwon’s lawyer that Kwon needed to attend, agreed to extradition from Montenegro, and may very well be in the USA by mid-March.

It additionally opposed separate trials for Terraform and Kwon, saying the instances have been nearly the identical, and that two trials would unnecessarily require whistleblowers and peculiar retail traders to testify twice.

U.S. District Choose Jed Rakoff will determine whether or not to maneuver the trial date. The SEC requested for April 15, to accommodate scheduling conflicts.

Kwon’s lawyer sought a delay till not less than March 18, and on Monday mentioned he wouldn’t search additional adjournments even when Kwon have been unable to attend on the brand new date.

The case stems from the collapse of TerraUSD, a “stablecoin” designed to take care of a relentless $1 worth, and Luna, a extra conventional token intently linked to TerraUSD.

Each cryptocurrencies misplaced an estimated $40 billion or extra when TerraUSD in Could 2022 proved unable to take care of its $1 peg.

The SEC mentioned Terraform and Kwon deceived traders concerning the stability of TerraUSD, and the way a well-liked Korean cellular cost app used the Terraform blockchain to settle transactions.

Final month, Rakoff dominated that Terraform and Kwon violated U.S. legislation by failing to register TerraUSD and Luna.

Kwon additionally faces associated U.S. prison fees, and an extradition request from his native South Korea. He was arrested in Montenegro final March.

The case is SEC v Terraform Labs Pte Ltd et al, U.S. District Court docket, Southern District of New York, No. 23-01346.