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Do Kwon Set to Miss Start of His Civil Court Proceedings

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Photo: EPA-EFE/Boris Pejovic

Cryptocurrency entrepreneur Do Kwon is unlikely to attend the initial phase of his civil trial set for March 25 on charges of fraud by the U.S. Securities and Exchange Commission (SEC). This absence is attributed to delays in his extradition process from Montenegro, as indicated by his attorney.

David Patton, Kwon’s legal representative, communicated to a federal court in Manhattan that his client does not intend to request a postponement of the trial, irrespective of the timing of his extradition. This stance reaffirms a commitment Patton made earlier in January. Kwon, along with his enterprise Terraform Labs, faces legal action from the SEC, which initiated in February of the previous year. This lawsuit is in connection to the significant market upheaval following the collapse of TerraUSD and Luna cryptocurrencies in May 2022, leading to approximately $40 billion in losses.

The SEC accuses Terraform and Kwon of misleading investors about the stability of TerraUSD, a stablecoin pegged to maintain a value of $1, and the utilization of Terraform’s blockchain by a widely used Korean mobile payment application for transactions. Despite these allegations, Kwon maintains his innocence. He is also confronting related criminal charges in the U.S. and has been detained in Montenegro since his arrest in March of the last year.

A recent decision by a court in Podgorica, Montenegro, favored Kwon’s extradition to the United States over South Korea, which was Kwon’s preference. Kwon is challenging this decision, with his local attorney, Goran Rodic, arguing that the court based its ruling on incorrect information regarding the precedence of the U.S. extradition request.

Rodic, in a statement attached to Patton’s letter, highlighted that the extradition proceedings in Montenegro have been unexpectedly prolonged due to various oversights by the lower court. He anticipates that Kwon’s extradition will not occur before the end of March.

In December, U.S. District Judge Jed Rakoff ruled that Terraform and Kwon breached U.S. regulations by not registering TerraUSD and Luna, further complicating Kwon’s legal challenges.

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