Attorneys representing Terraform Labs co-founder Do Kwon are reportedly fighting in court against the SEC's allegations that Kwon defrauded US investors by illegally issuing unregistered securities.
On April 21, Kwon's lawyers asked a judge to dismiss the SEC's lawsuit, claiming the regulator's takeover was baseless, according to Bloomberg. In their request to dismiss the lawsuit, Kwon's attorneys asserted that US law prohibits the regulator from using the laws to exercise jurisdiction over digital assets in this case.”
Additionally, attorneys claim the SEC failed to prove that Kwon defrauded US investors in the $40 billion debacle of Terra's TerraUSD (UST) and LUNA. According to lawyers, the UST stablecoin is a currency, not a security. Legal proceedings began after Kwon was arrested at Montenegro's Podgorica airport on March 23 when he allegedly tried to fly to Dubai using forged documents. Following his arrest, South Korean and US authorities have demanded the entrepreneur's extradition. At the time of writing, it was unclear which country, if any grant his extradition request. "While we have received multiple extradition requests, I would say that the decision to which country to extradite them is based on several factors, such as the gravity of the crime, the location and time of the crime. ,we receive extradition requests order and several other factors,” Montenegro Justice Minister Marko Kovac said on March 29 through a translator.
The Seoul Southern District Court recently rejected the arrest warrant for Terraform Labs co-founder Shin Hyun-Seong. While prosecutors viewed Kwon's arrest as an opportunity to contain Shin, the court rejected the request, citing the unsubstantiated nature of the allegations and the fact that Shin was unlikely to be a flight risk or destroy evidence.
