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Court Backs SEC in High-Profile Terraform and Do Kwon Legal Battle
- Do Kwon was charged with selling unregistered securities (LUNA & MIR) by the SEC, who have been granted summary judgement in their favour.
- Kwon’s extradition to the US has been delayed due to a potential procedural violation in Montenegro, as America and South Korea jostle for access to the alleged criminal.
- The collapse of Terra and UST remains one of crypto’s biggest disasters, as Kwon’s topsy-turvy legal saga continues.
The collapse of Terraform Labs and its associated stablecoin, UST, was one of the biggest calamities the cryptosphere has ever experienced. After the highly-traded stablecoin fell from its peg, 40 billion-plus dollars were wiped from the industry in a matter of days. A lengthy legal process followed, with the founder of Terraform Do Kwon charged with several offences, including fraud.
Unregistered Securities Key to SEC Case
Do Kwon has been in the firing line of several U.S. agencies. While the main criminal allegations aren’t quite in the Securities and Exchange Commission’s (SEC) jurisdiction, they have instead charged him with the sale of unregistered securities. The two cryptocurrencies in question are Terra (LUNA) and Mirror Protocol (MIR).
And today, the District Court of Southern New York ruled in favour of the SEC, granting the regulatory body a “summary judgement”. A summary judgement essentially allows a judge to commit to a ruling on a case without hearing a full trial.
According to the court documents, Kwon “orchestrated a multi-billion-dollar fraud involving the development, marketing, and sale of various cryptocurrencies”.
It will be interesting to see how the ruling affects the SEC’s ongoing legal battle with prominent centralised exchange Coinbase.
Extradition to US Delayed, Do Kwon Still Held in Montenegro
Just last week, Montenegro authorities delayed the disgraced former billionaire’s extradition to the United States or South Korea, where he is set to face several charges. The Balkan nation had originally granted the U.S.’s request for Kwon to be extradited, however, have rescinded this promise pending a review of a potential violation of criminal procedure rules. Experts believe that Kwon will need to face the music in South Korea first, before potentially being handed over to American authorities. Either way, the founder of Terra will face time in prison for his actions as the figurehead of crypto’s second-largest collapse in 2022.
Author
Ben Knight
Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.
