Trial for former Terraform Labs CEO Do Kwon pushed back to March

Quick Take

  • Former Terraform Labs CEO Do Hyeong Kwon, who was charged in February by the Securities and Exchange Commission over the collapse of algorithmic stablecoin Terra USD, faces a jury trial on fraud claims that was originally scheduled for Jan. 29. 

The trial of Terraform Labs' former CEO has been pushed back to late March after his lawyer said he faces challenges to get him out of Montenegro where he is being held on a prior conviction. 

Do Hyeong Kwon, who was charged in February by the Securities and Exchange Commission over the collapse of algorithmic stablecoin Terra USD, faces a jury trial on fraud claims that was originally scheduled for Jan. 29. 

"Despite Kwon's representation that he has consented to his extradition from Montenegro, where he is presently being held, there is no absolute guarantee that he will be released in time for his appearance at a late March trial," said Judge Jed Rakoff in the U.S. District Court for the Southern District of New York in an order on Tuesday. 

"Nevertheless, the Court will indulge his counsel's request given their express recognition that the trial cannot be further postponed," Rakoff continued, setting the new trial date for March 25. 

A previous conviction in Montenegro

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Kwon's lawyers asked to postpone the trial on Jan. 11 and said the former CEO would not likely be extradited until February or March at the earliest. 

"While Mr. Kwon, through his counsel in Montenegro, has made every effort to be extradited from Montenegro as quickly as possible, the process has been slow going and is made more complicated by the dueling requests and the fact that Mr. Kwon is serving a sentence in Montenegro for his conviction on the local charges there," Kwon's lawyer said in a court filing. 

Kwon was arrested in March last year at a Montenegrin airport for attempting to travel with forged documents.

Rakoff sided with the SEC last month in its claim that Kwon and Terraform Labs offered and sold unregistered securities. Rakoff granted summary judgment for the SEC on that claim, while also siding with Terraform "on the claims involving offering and effecting transactions in security-based swaps," according to an order filed in December. 


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About Author

Sarah is a reporter at The Block covering policy, regulation and legal happenings. Before, Sarah was a reporter with CQ Legal writing about securities regulation, which is where she first started reporting on crypto. Sarah has also written for The Bond Buyer and American Banker, among other finance-related publications. She graduated from the University of Missouri and earned a degree in print and digital journalism. Sarah is based in Washington D.C., and is an avid coffee lover. You can follow her on Twitter @ForTheWynn.

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