US District Judge Jed Rakoff rejected Kwon and Terraform's request for an order forcing the SEC to withdraw its request for Singapore regulators to obtain documents from the defenders and the Luna Foundation Guard, which was formed to raise funds, at a hearing Friday. The fund's sole purpose, according to court records, is to hold $1 worth of the TerraUSD stablecoin.
The SEC instructed Kwon and Terraform in February, accusing them of offering and selling unregistered securities and of running a scheme that wiped at least $40 billion in market value when the stablecoin collapsed. Kwon was arrested in Montenegro in March, months after fleeing authorities native South Korea, and has also been charged with fraud by US prosecutors in New York. Kwon's US attorney, Stephen Senderowitz, did not immediately respond to a request for comment on Monday. The SEC also did not immediately respond to a request for comment.
It was unclear what records the SEC sought from Singapore, but Terraform is based in the island nation. Police there said in March that they had opened an investigation into the stablecoin debacle. This year's cryptocurrency slump set back Singapore's earlier and embrace of blockchain's technology spurred a tighter regulatory stance.
Both the United States and South Korea are currently seeking Kwon's extradition from Montenegro. South Korean prosecutors on Monday confirmed a report that they were investigating Kwon's transfer of funds to a top law firm in Seoul ahead of Terra's collapse and Exchange Commritis Secu v. Terraform Labs Pte Ltd., 23-cv-1346, US District Court for the Southern District of New York.
