The U.S. Securities and Exchange Commission (SEC) has recently agreed to postpone the trial against Terraform Labs and its former top executive, after Terraform Labs’ co-founder, Do Kwon, expressed his intention to attend the trial. This delay has been considered reasonable by the SEC, as Kwon has agreed to extradition from Montenegro and is expected to arrive in the U.S. by mid-March. Originally scheduled for January 29th, the trial will now take place on April 15th.
Kwon’s attempts to delay the trial were first reported on January 11th when his lawyers requested a delay until March 18th, almost one month earlier than the date proposed by the SEC. However, Kwon’s lawyer has clarified that if his client is unable to attend, they will not seek further adjournments. Although both parties have reached an agreement, Judge Jed Rakoff, who presides over the case, still needs to decide whether to grant the request.
The SEC has stated in its latest filing that it opposes holding separate trials for Terraform Labs and Kwon. The regulator argues that the cases are almost identical, and separate trials would result in duplicate testimony. This information was reported by Reuters, citing a court filing that is currently inaccessible to the public. Neither the SEC nor Terraform Labs have provided any comments regarding this matter.
The SEC initially charged Terraform Labs in February 2023, accusing the cryptocurrency company of committing fraud amounting to billions of dollars. Although the case has not concluded, a judge issued summary judgments in December, favoring Terra and the SEC on two separate issues. This ruling suggests that there is substantial evidence against the company.
It is worth noting that Kwon is currently serving a prison sentence for passport fraud in Montenegro. His sentence is expected to end on February 15th, which means that he could potentially be released before being extradited for the upcoming trial. This detail adds another layer of complexity and uncertainty to the proceedings.
The recent agreement between the SEC and Terraform Labs to postpone the trial demonstrates the significance of Kwon’s presence as a key figure in the case. As both parties await Judge Jed Rakoff’s decision on whether to grant the trial delay, the outcome remains uncertain. The SEC’s opposition to separate trials for Terraform Labs and Kwon reflects the similarities between the two cases and highlights the need to avoid repetition. With the pending release of Kwon from prison, the trial takes on additional complexity. Only time will tell how these factors will ultimately shape the outcome of the trial against Terraform Labs and its former top executive.
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