Lawyers for former Terra boss Do Kwon have asked a US federal court to reject a request by the US Securities and Exchange Commission (SEC) to allow the US to investigate the collapse of the Terra ecosystem.
In a suitable one input Dated Sept. 27, Kwon’s legal team said the SEC’s request to try him in the U.S. before Oct. 13 was “impossible” because he was being held in Montenegro without a “scheduled release or extradition date.”
In addition, Kwon’s team explained that providing written testimony in response to the SEC’s questions would violate his right to due process under U.S. law.
“An order prescribing the impossible serves no practical purpose and undermines judicial authority.”
Kwon’s lawyers have not directly objected to Kwon being questioned, but have indicated that it should take place in Montenegro, where the Terra founder is currently on bail.
According to the filing, the deadline for filing investigative briefs in the SEC’s case against Guan and Terraform Laboratories is Oct. 13.
Kwon’s legal team indicated that the Montenegrin court could “informally” hold a hearing on Oct. 13 or 26 in which it would ask questions from the SEC. However, the SEC noted that the process may be considered “inadequate” and will investigate Guan further after the filing deadline.
On February 16, the SEC sued Terraform Labs and Kwon for “orchestrating a multibillion-dollar cryptocurrency scam.”
Today we accused Singapore-based companies Terraform Labs PTE Ltd and Do Hyeong Kwon of engaging in a multibillion-dollar crypto-asset scam involving algorithmic stablecoins and other crypto-asset securities.
— US Securities and Exchange Commission (@SECGov) February 16, 2023
In the lawsuit, the SEC alleges that Terraform and Kwon actively “advertised and marketed” their Anchor Protocol, which at one point was advertised as paying 20% interest on TerraUSD (UST) deposits. Terraform and Kwon also allegedly misled investors about the true stability of Terra’s stablecoin.
Kwon and Terraform Labs CFO Han Sang-joon were arrested in Montenegro in March 2023 after allegedly trying to leave the country using false travel documents. Both had their original passports confiscated in South Korea in October 2022.
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