Terraform Labs co-founder Do Kwon to miss start of US SEC fraud trial


FILE PHOTO: Do Kwon, the cryptocurrency entrepreneur, who created the failed Terra (UST) stablecoin, is taken to court in handcuffs, to face charges of forging official documents, in Podgorica, Montenegro, March 24, 2023. REUTERS/Stevo Vasiljevic/File Photo

NEW YORK (Reuters) -The cryptocurrency entrepreneur Do Kwon will likely miss at least the start of a March 25 civil trial on U.S. Securities and Exchange Commission fraud charges because of a delay in extraditing him from Montenegro, his lawyer said on Monday.

In a letter filed in federal court in Manhattan, Kwon's lawyer David Patton said Kwon will not seek to adjourn the trial date, regardless of when he is ultimately extradited. Patton had made a similar pledge in January.

Kwon and his company Terraform Labs were sued by the SEC last February over the May 2022 collapse of the TerraUSD and Luna cryptocurrencies, which authorities have said caused about $40 billion of losses in crypto markets.

The SEC said Terraform and Kwon deceived investors about the stability of TerraUSD, a "stablecoin" designed to maintain a constant $1 price, and how a popular Korean mobile payment app used the Terraform blockchain to settle transactions.

Kwon has denied wrongdoing. He also faces related U.S. criminal charges, and has been held in Montenegro since his arrest last March.

Last week, a court in Montenegro's capital of Podgorica said Kwon should be extradited to the United States instead of his native South Korea, which he preferred.

Kwon is appealing the ruling, which his local lawyer Goran Rodic said was based on "erroneous" information that the U.S. extradition request arrived first.

In a declaration attached to Patton's letter, Rodic said the Montenegrin proceedings have taken far longer than expected because of "numerous unanticipated mistakes" made by the lower court there.

Rodic said he did not expect Kwon to be extradited anywhere before the end of March.

In December, U.S. District Judge Jed Rakoff, who oversees the SEC case, said Terraform and Kwon violated U.S. law by failing to register TerraUSD and Luna.

(Reporting by Jonathan Stempel in New York; Editing by Leslie Adler and Deepa Babington)

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