Terra’s Do Kwon To Miss Start Of SEC Trial In US

The fraud trial in the United States of Do Kwon, the disgraced founder of collapsed crypto company Terraform Labs, will likely start without him.

This is according to Do Kwon’s US lawyer, David Patton, who was quoted by Reuters as stating that a delay in extraditing him from Montenegro would mean his client would likely miss at least the start of the 25 March civil trial on US Securities and Exchange Commission fraud charges.

It comes after the High Court in Montenegro had last week ruled that Do Kwon (also known as Kwon Do-hyeong) should be extradited to the US to stand trial on fraud charges, rather than to his native country of South Korea, which had issued an international arrest warrant for him ahead of the US.

Extradition appeal

It was reported that Do Kwon is appealing last week’s ruling by the High Court in the Montenegrin capital of Podgorica, claiming the court decision was based on misinformation that the US had requested extradition ahead of South Korea.

In February 2023 the US Securities and Exchange Commission (SEC) had charged Singapore-based Terraform Labs PTE Ltd and Do Kwon with orchestrating a multi-billion dollar crypto asset securities fraud.

In December last year a US federal judge had ruled that Do Kwon and Terraform Labs had violated US law by failing to register two digital currencies that collapsed in 2022.

The US judge also delayed the US trial to 25 March to allow time for Kwon to be extradited.

Now in the letter filed in federal court in Manhattan, Kwon’s lawyer David Patton was quoted by Reuters as saying Kwon will not seek to adjourn the US trial date, regardless of when he is ultimately extradited.

The Montenegrin lawyer for Do Kwon, Goran Rodic, meanwhile has reportedly stated that the Montenegrin proceedings have taken far longer than expected because of “numerous unanticipated mistakes” made by the lower court there.

Rodic said he did not expect Kwon to be extradited anywhere before the end of March.

Protracted case

The case against Do Kwon and Terralabs has been ongoing for a while now, after Do Kwon had moved from South Korea to Singapore with his family following the 2022 collapse of his $40 billion digital asset project – which included the stablecoin Terra and its sister token Luna.

Terraform had issued the TerraUSD “stablecoin”, intended to maintain a 1:1 peg with the US dollar.

It is thought that nearly 250,000 people had invested in Terraform Labs’ coins, and blockchain analytics firm Elliptic estimated that investors in TerraUSD and Luna lost an estimated $42 billion.

Do Kwon had denied that he was on the run, but did not reveal his whereabouts after police in Singapore could not locate him, after South Korea had issued an international arrest warrant, and Interpol issued a “red notice” for his arrest.

After months of searching Do Kwon was arrested in Podgorica, the capital city of the Balkan country of Montenegro in March 2023.

Both South Korea and the US had sought his extradition to their respective jurisdictions.

Kwon and a second person identified as Han Chang-joon, Terraform Labs’ former finance officer, had been arrested when they tried to board a flight to Dubai.

Do Kwon had been sentenced to four months in prison in Montenegro for using fake travel documents, and had been held in custody there pending his possible extradition to the US.