Disgraced Terraform Labs founder Do Kwon is reportedly asking a judge to delay the U.S. Securities and Exchange Commission’s (SEC) trial to March so he can make an appearance. In a new letter addressed to the court uncovered by Inner City Press, Kwon’s lawyers ask District Judge Jed S. Rakoff to postpone the trial until […]
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A US judge has ruled that collapsed crypto company Terraform Labs and its founder Do Kwon offered and sold two digital assets as unregistered securities. The U.S. Securities and Exchange Commission (SEC) and Terraform Labs both requested summary judgment in an ongoing fraud case. The SEC alleges the company and Kwon facilitated a multi-billion dollar […]
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The founder of Terraform Labs, the crypto firm behind the Terra (LUNA) collapse has won an appeal in Montenegro over being extradited to the United States. According to a statement from the Montenegro Appeals Court, the decision to extradite Terra founder Do Kwon to the US or South Korea has been overturned. Kwon was initially arrested […]
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The Terraform Labs co-founder had been awaiting extradition to either the U.S. or South Korea after a prison sentence in Montenegro for using falsified travel documents.
Terraform Labs co-founder Do Kwon, expected to be extradited to the United States to face criminal charges, will reportedly stay in Montenegrin custody until February.
According to a Dec. 12 Bloomberg report, authorities with the U.S. and South Korea requested Montenegrin officials hold Kwon for an additional two months following the conclusion of his prison sentence. The Terraform Labs co-founder was arrested in Montenegro in March for using falsified travel documents and sentenced to four months behind bars.
Kwon, a South Korean national formerly based in Singapore, has been charged in the U.S. and South Korea for his alleged role in the collapse of Terra. The Wall Street Journal reported on Dec. 7 that the U.S. would be taking custody of Kwon before South Korea. Both countries have extradition requests pending at the time of publication.
The Balkan nation Montenegro is reportedly looking to extradite disgraced Terra (LUNA) founder Do Kwon to the United States. Citing “people familiar with the matter,” the Wall Street Journal reports that Montenegro Justice Minister Andrej Milovic has said privately that he plans to ship Kwon to the US rather than South Korea, which also wants […]
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The Terraform Labs co-founder had been awaiting extradition to either the United States or South Korea after being arrested and charged in Montenegro.
Terraform Labs co-founder Do Kwon will reportedly be extradited to the United States rather than South Korea to face criminal charges.
According to a Dec. 7 Wall Street Journal report citing people familiar with the matter, Justice Minister Andrej Milovic in Montenegro plans to grant U.S. officials’ request for extradition. Kwon was arrested in Montenegro in March and sentenced to four months in prison for using falsified travel documents. He has also been charged in the U.S. and South Korea for his alleged role in the collapse of Terraform Labs.
Milovic reportedly said the announcement would be made public “in a timely manner.” If extradited to the United States, Kwon faces eight charges, including commodities fraud, securities fraud, wire fraud, and conspiracy to defraud and engage in market manipulation related to his time at Terra. The U.S. Securities and Exchange Commission also charged Kwon with “defrauding investors in crypto schemes” in February.
Lawyers for Terraform Labs co-founder Do Kwon have mounted a final attempt to appeal his extradition from Montenegro.
Terraform Labs co-founder Do Kwon has launched his final attempt to appeal a Montenegrin court’s decision that could see him extradited from the country.
In a Dec. 6 report, local state media stated that lawyers for Kwon had officially appealed the Nov. 24 decision from the High Court of Podgorica, which approved that Kwon could be extradited to either the United States or South Korea pending a final decision by the Montenegrin Ministry of Justice.
The Ministry of Justice will now consider the appeal and reexamine the initial extradition order and is currently slated to make a final decision on the matter by Dec. 15.
The extradition of disgraced Terra (LUNA) founder Do Kwon to the US and South Korea has been approved by a court in Montenegro. In a new press release, the Higher Court of Podgorica has ruled that the legal requirements needed for extraditing Kwon to the US and South Korea have been met. “It was established […]
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Do Kwon, the co-founder now-collapsed Terraform ecosystem maintains he and his firm did not skirt U.S. securities laws.
Terraform Labs co-founder Do Kwon has requested a United States district judge to reject the securities and fraud suit from the federal securities regulator, claiming it has failed to prove they did anything wrong.
In an Oct. 27 filing to a New York District Court, lawyers for Kwon and Terraform argued its cryptocurrencies Terra Luna Classic (LUNC), TerraClassicUSD (USTC), Mirror Protocol (MIR) and its Mirrored Assets (mAssets) that reflect stocks on-chain are not securities as the Securities and Exchange Commission alleged.
“After two years of investigation, the completion of a discovery period that resulted in the taking of more than 20 depositions, and the exchange of over two million pages of documents and data, the SEC is evidentiarily no closer to proving that the Defendants did anything wrong,” the lawyers wrote.
They added the “evidence does not exist to support many of the SEC’s claims” and asserted the regulator “knew some of its allegations were false” — in particular, an allegation that Kwon and Terraform secretly moved millions into Swiss bank accounts for their own gain.
In its suit against Kwon and Terraform filed in February, the SEC claimed the pair sent 10,000 Bitcoin (BTC) to a Swiss financial institution and withdrew $100 million. It also claimed they committed fraud by “repeating false and misleading statements.”
“The SEC knew this allegation was false when it filed this case,” Kwon’s lawyers wrote. ”This is made even worse by the undisputed fact that TFL had no customers, and thus no customer funds.”
The $40 billion Terra ecosystem collapsed in May 2022 after its USTC algorithmic stablecoin lost its U.S. dollar peg.
Related: Terraform co-founder Shin blames protocol for collapse during trial in S. Korea
Kwon and Terraform also moved to exclude the opinion of the SEC’s experts including a report from Rutgers University economics professor Bruce Mizrach which they called “junk science.”
Judge Jed Rakoff, who oversees the case, denied Terraform’s earlier attempt to toss the lawsuit.
Kwon is currently detained in Montenegro and has previously asked the court to reject the SEC’s motion to extradite and interview him in the U.S.
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Slack conversations between Terraform Labs' co-founders Do Kwon and Daniel Shin have exposed their contemplation of orchestrating fraudulent transactions on the Terra blockchain.
Terraform Labs co-founder Do Kwon has refuted the significance of Slack messages as evidence, which involved discussions with his co-founder Daniel Shin about manipulating transactions on the Terra blockchain to attract investors.
The United States Securities and Exchange Commission (SEC) included the Slack conversation between the two co-founders, which was dated back to September 2019, in a recent court filing.
The message report suggests the two co-founders were brainstorming strategies to increase investor interest in the Terra blockchain. However, Kwon intended to shape transactions to make them more attractive:
“I can just create fake transactions that look real.”
Kwon further elaborates that these transactions will generate fees and can be gradually phased out as Chai (XCH) grows.
Kwon then appears to attempt to make a pact with Shin to keep the plan confidential. "I wont tell if you wont," he stated.
He further asserted that it will be challenging for individuals to uncover the manipulation tactics.
“All the power to those that can prove its fake,” he states, adding that he will be making every effort to prevent the scheme being exposed:
“Because I will try my best to make it indiscernable.”
However, Kwon refutes the evidence against him, alleging it was taken out of context.
His legal team claim that Kwon and Shin spoke about the possibility of staking LUNA tokens with validators, rather than creating counterfeit Chai transactions:
“Finally, the SEC misstates evidence in its gratuitous effort to prejudice Mr. Kwon in a procedural motion having nothing to do with the merits (or lack of merit) of the SEC’s case.”
“In other words, the SEC’s motion relies on misrepresentations about irrelevant evidence to support its spurious claim that it has been unable to get discovery from Mr. Kwon,” Kwon's lawyers added.
Related: Do Kwon converted illicit funds from LUNA to Bitcoin: S.Korean prosecutors
Meanwhile, Kwon's lawyers are pushing a US federal court to reject the SEC's request to extradite him to the US over the collapse of the Terra ecosystem.
Kwon's legal team declared the request as "impossible" due to him being detained in Montenegro with no scheduled release date after being found guilty of passport fraud.
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