A federal judge has granted a delay in the SEC's case against Terraform Labs, pushing the trial start date to March 25. The decision follows a request from Do Kwon, who sought personal participation in his defense. Judge Jed Rakoff noted that while there is no guarantee Kwon will be released from Montenegro's extradition proceedings in time for the trial, he accommodated the request for the SEC to join. The trial, originally set for January 29, marks approximately a year since the SEC filed charges against Terraform and Kwon in February 2023. Both parties face allegations of orchestrating a billion-dollar crypto-asset securities fraud related to tokens formerly known as TerraUSD (UST) and Terra.
The Terra ecosystem experienced a collapse in May 2022, and Kwon's whereabouts have largely been unknown since then. In March 2023, Montenegrin authorities arrested the Terraform Labs co-founder on charges of using forged travel documents, resulting in a four-month prison sentence. Extradition proceedings between the United States and Montenegro are ongoing, and Kwon remains in the country. The personal participation of Kwon in the SEC's case is uncertain, but pretrial motions continue to progress. In December, Judge Rakoff granted summary judgment in favor of the SEC regarding Terraform's handling of unregistered securities, and in favor of Kwon and Terraform regarding the offer and sale of securities-based swaps.
