Do Kwon Lawyers Reportedly Dismiss SEC‘s Securities Fraud Allegation – According to reports, lawyers defending Do Kwon, the co-founder of Terraform Labs, contested the United States Securities and Exchange Commission’s claims that Kwon deceived U.S. investors by offering unregistered securities in violation of the law. According to a Bloomberg report, on April 21, Kwon’s legal team requested the judge to dismiss the SEC’s lawsuit by stating that the accusations made by the regulator were baseless.
They also argued that the federal securities law does not allow regulators to exercise authority over the digital assets involved in this case. Furthermore, the legal team argued that the SEC was unable to demonstrate that Kwon had committed fraud against American investors in relation to the $40 billion failure of Terra’s TerraUSD (UST) and LUNA. They contended that UST stablecoin is a form of currency and not a security.
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Legal proceedings against Kwon started after he was arrested at Podgorica airport in Montenegro on March 23 while allegedly trying to fly to Dubai using counterfeit documents. Following his arrest, South Korean and American authorities sought his extradition. Currently, it is uncertain which of the two countries, if any, will be successful in their request for Kwon’s extradition.
“In the case when we receive several extradition requests, I would like to say that determining to which state they will be extradited is based on several factors like the severity of the committed criminal offense, the location and time when the criminal offense has been committed, the order in which we have received the request for extradition and several other factors,” said Montenegrin Justice Minister Marko Kovač through an interpreter on March 29.
Terraform Labs co-founder Shin Hyun-Seong’s request for an arrest warrant was recently denied by the Seoul Southern District Court. Despite prosecutors viewing Kwon’s arrest as a chance to apprehend Shin, the court declined the application. The reason cited was the unverified nature of the accusations and the low possibility of Shin absconding or tampering with evidence.