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The legal representatives of Do Kwon, the co-founder of Terraform Labs, have approached a federal court with a plea to prevent the United States Securities and Exchange Commission (SEC) from interrogating him on American soil regarding the failure of the Terra ecosystem.
A recent filing on September 27 revealed that Kwon's attorneys argued that it's infeasible for the SEC to question him stateside before October 13. This is attributed to Kwon's ongoing detention in Montenegro, where no definitive release or extradition date has been provided.
Highlighting his legal rights, Kwon's attorneys mentioned that supplying written testimonies in response to the SEC's queries would be contradictory to his right to due process as per American law. Their stance is that ordering an unrealistic directive might potentially erode the judicial system's authority.
Though Kwon has not directly declined an interrogation, his lawyers clarified that if any deposition is to occur, it should happen in Montenegro, given that he's currently released on bail in the country.
The documentation indicates that the discovery deadline for the SEC’s case against Kwon and Terraform Labs is slated for October 13. The Montenegrin legal system has hinted at possibly holding a session either on October 13 or 26, during which Kwon could be queried based on the SEC’s inquiries. Nonetheless, the SEC has shown reservations, suggesting they might find this approach lacking and might opt for a separate deposition session post the discovery deadline.
Earlier in the year, on February 16, the SEC filed a lawsuit against Terraform Labs and Kwon, accusing them of masterminding a substantial fraudulent scheme involving cryptocurrency assets. The SEC's charges revolve around Terraform and Kwon's aggressive promotion of their Anchor Protocol. They promised an enticing 20% interest rate on deposits made in TerraUSD (UST). The SEC further alleges that Terraform and Kwon provided misleading information concerning the reliability of Terra's digital currency.
In a significant development, both Kwon and Terraform Labs’ CFO, Han Chang-Joon, were taken into custody in Montenegro during March 2023. They were apprehended for reportedly using counterfeit travel credentials while attempting to exit the nation. Their authentic passports had been seized earlier in South Korea in October 2022.
