A New York court should oppose the Securities and Exchange Commission's move to take former Terraform Labs CEO Do Kwon's deposition in the U.S. because he is currently detained in Montenegro, Kwon's lawyers argued.
Last week, the SEC said the Southern District of New York should grant its request to ask Kwon questions in the U.S., but Kwon’s lawyers said that was impossible.
Kwon was detained in Montenegro in March 2023 and later was found guilty by a court there of using a fake Costa Rican passport in an attempt to leave the country. Kwon was sentenced to four months in jail in June.
Both the U.S. and South Korea have requested to extradite Kwon.
The SEC charged Terraform Labs and Kwon in February over its algorithmic stablecoin Terra USD, which collapsed last year. The agency accused both Terraform and Kwon of raising billions from investors by offering and selling an inter-connected suite of crypto asset securities, many in unregistered transactions."
Algorithmic stablecoins, like Terra USD, use market incentives via algorithms to maintain a stable price. Terra was linked to Luna, a governance token, to keep the prices stable. Terra USD crashed in May 2022, wiping out billions.
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