SEC assents to Do Kwon, Terra trial delay until April 15

The U.S. Securities and Exchange Commission is unopposed to delaying Terra’s crypto fraud trial and instead open to waiting till Terraform co-founder Do Kwon is extradited.

Federal prosecutors filed two court arguments for the trial of Do Kwon and his blockchain startup Terraform Labs over the $40 billion collapse of TerraLuna (LUNC) and TerraUSD (UST) in May 2022.

The SEC agreed to a “modest adjournment” of the Terraform case until mid-April while proceedings over Kwon’s extradition continue in Montenegro. The U.S. Securities and Exchange Commission (SEC) also argued against separate trials for Kwon and Terraform since the cases are commingled. 

Kwon’s lawyers had sought court approval to delay Terra’s trial until Mar. 18 so the former crypto tycoon could attend the trial. His lawyers disclosed that Kwon would not file for a second extension if the defendant could not meet the court’s new date.

Meanwhile, the ex-tech billionaire reportedly filed another appeal to overturn a Montenegro High Court’s ruling upholding extradition requests from his native South Korea and the U.S. where he faces charges.

According to his attorneys, the High Court’s verdict ignored a bilateral extradition treaty with America and the European Convention on Extradition. Kwon had previously won an appeal against the extradition requests in November last year. However, the High Court in Podgorica, where Kwon was arrested, reinstated its ruling weeks later in December. 

Do Kwon and Terraform are accused of misleading users and investors about the stability of UST, an algorithmic stablecoin pegged to the U.S. dollar. UST could not maintain its promised $1 price, leading to an implosion within Terra’s ecosystem. 

Terra’s crash would eventually precede a domino of bankruptcies and the start of 2022’s crypto winter.