- Do Kwon’s lawyers have requested U.S. authorities to question him in Montenegro.
- It was in February that the SEC sued Terraform Labs and Kwon for securities violations.
Terraform Labs co-founder Kwon Do-Hyung “Do Kwon” has opposed the U.S. Securities and Exchange Commission’s (SEC) extradition request.
Kwon’s legal team has requested the U.S. District Court for the Southern District of New York to deny the SEC’s request to question him in the U.S. before the case’s discovery cut-off date of 13 October.
They stated that it was “impossible” to accept the regulator’s request due to Kwon’s detention in Montenegro with “no scheduled release or extradition date.” Furthermore, a written testimony in response to the SEC’s questions would be in conflict with his right to due process under U.S. law.
Instead, Kwon’s lawyers suggested that the U.S. authorities question him in Montenegro, where he is currently out on bail. A Montenegrin court apparently proposed it may soon hold a hearing next month, during which he could be asked the SEC’s questions.
However, the U.S. regulator said that the process was “inadequate.” It may thus request another deposition after the cut-off date.
It was last week that the SEC asked the court for permission to examine Kwon before the case’s discovery cut-off date of 13 October.
Terraform Labs, the harbinger of crypto winter
The Singaporean crypto firm was the parent company of the Tether [USDT] stablecoin and its sister token Luna [LUNA] which crashed in May 2022. The disastrous depegging event, which turned into a death spiral, cost the crypto market more than $60 billion.
In February 2023, the SEC sued Terraform Labs and Kwon for securities violations. The lawsuit referred to both LUNA and UST as securities. The court filing highlighted the role of Terraform and Kwon in promoting the Anchor Protocol, a yield-bearing protocol that offered a return of 19-20% interest.
The U.S. is not the only country seeking Kwon’s extradition. In September 2022, South Korea asked Interpol to place him on the agency’s red alert list across the agency’s 195 member nations; the authorities also revoked his passport.
Montenegro’s authorities arrested Kwon in March 2023. The local court sentenced him to four months in June 2023 after he was found guilty of forging official documents.