The U.S. Securities and Exchange Commission is not opposed to delaying Terra’s cryptocurrency fraud trial and is instead open to waiting for Terraform co-founder Do-Hwan Kwon to be extradited.
Federal prosecutors have filed two court arguments for the trial of Do-Kwon Kwon and his blockchain startup Terraform Labs in connection with the collapse of $40 billion TerraLuna (LUNC) and TerraUSD (UST) in May 2022.
The SEC agreed to “appropriately postpone” the Terraform case until mid-April while proceedings on Kwon’s extradition from Montenegro continue. The U.S. Securities and Exchange Commission (SEC) also argued that it was opposed to a separate trial because the trials for Kwon and Terraform were mixed.
Kwon’s lawyers have sought court approval to delay Terra’s trial until March 18 so the former cryptocurrency tycoon can attend trial. His lawyers have said Kwon will not seek a second extension if the defendant fails to meet the new court date.
Meanwhile, the former tech billionaire has reportedly filed another appeal seeking to overturn a ruling by Montenegro’s High Court upholding extradition requests from South Korea and the United States where he was charged.
According to his lawyers, the High Court’s ruling ignores the bilateral extradition treaty with the United States and the European Extradition Convention. Previously, Mr. Kwon won an appeal against his extradition request in November last year. However, the Podgorica High Court, where Kwon was arrested, resumed sentencing a few weeks later in December.
Dodo Kwon and Terraform were accused of misleading users and investors about the stability of UST, an algorithmic stablecoin pegged to the U.S. dollar. UST was unable to maintain the promised $1 price, leading to a collapse within the Terra ecosystem.
The collapse of Terra will ultimately be preceded by a domino of bankruptcies and the start of the cryptocurrency winter of 2022.