Legal Maneuvers Amidst Turmoil
Lawyers representing Do Kwon, the controversial co-founder of Terraform Labs, have petitioned a federal court to dismiss the SEC’s attempt to interrogate him in the United States. The SEC is interested in questioning Kwon due to the collapse of the Terra ecosystem, which sent shockwaves through the crypto community.
Detention Complications
In a filing made on September 27, Kwon’s legal representatives argued that the request from the SEC is simply unfeasible. The reason? Kwon is currently detained in Montenegro with no clear timeline for his release or potential extradition. This predicament raises the question: how can one be interrogated when they are not free to travel?
Constitutional Concerns
Kwon’s attorneys maintain that providing a written testimony to the SEC would infringe on his rights to due process as guaranteed by U.S. law. According to them, “An order mandating something that is impossible serves no practical purpose and risks undermining judicial authority.” It’s a classic case of lawyers playing chess while the white-collar crime drama unfolds.
The SEC’s Next Steps
While Kwon’s legal team has indicated a willingness for a deposition, they’ve made it clear their client can only participate from Montenegro, where he remains out on bail. As the legal clock ticks down towards the SEC’s discovery cut-off on October 13, the tension continues to build.
Background of the Case
The SEC first initiated its legal proceedings against Kwon and Terraform Labs on February 16, accusing them of orchestrating a multi-billion dollar crypto asset securities fraud. The agency claims that Kwon and his team lured investors by promoting the Anchor Protocol, which absurdly claimed a 20% interest rate on TerraUSD (UST) deposits, while also misleading investors regarding the stability of the stablecoin.
The Arrests
Kwon, alongside Terraform Labs’ CFO Han Chang-Joon, was apprehended in Montenegro in March 2023 for allegedly utilizing falsified travel documents. This arrest followed a saga of misadventures that began when Korean authorities confiscated their passports back in October 2022. Talk about a plot twist!
