Last Updated on September 28, 2023 by Bitfinsider
Attorneys for Do Kwon, one of the former co-founder of Terraform Labs, have asked a federal court to deny the request of the Securities and Exchange Commission (SEC) to examine him in the United States about the collapse of the Terra ecosystem.
Kwon’s legal team stated in a filing dated September 27 that the SEC’s request to interview him in the United States prior to October 13 was “impossible” because of his arrest in Montenegro and the lack of a “scheduled release or extradition date.”
Furthermore, Kwon’s legal team said that it would be against U.S. law for him to give written evidence in response to the SEC’s inquiries.
Notably, Kwon’s attorneys stated that although Kwon did not expressly object to a deposition, it would have to happen in Montenegro, where the creator of Terra is now being held without bond.
The petition states that October 13 is the deadline for discovery in the SEC’s lawsuit against Kwon and Terraform Labs.
Kwon’s legal team also stated that a Montenegrin court had “informally” said it might still convene a hearing on October 13 or October 26 to ask Kwon the questions the SEC had asked. The SEC did, however, warn that it might decide that this procedure was “inadequate” and that Kwon should take another deposition after the deadline for discovery.
In a lawsuit filed on February 16, the SEC accused Kwon and Terraform Labs of “orchestrating a multi-billion dollar crypto asset securities fraud.”
The SEC said in the lawsuit that Kwon and Terraform “touted and marketed” their Anchor Protocol, which at one stage was touted as offering a 20% interest rate on deposits made with TerraUSD (UST). Assertions were made that Kwon and Terraform had misled investors on the reliability of Terra’s stablecoin.
In March 2023, Kwon and Han Chang-Joon, the chief financial officer of Terraform Labs, were detained in Montenegro for reportedly attempting to flee the nation using fraudulent travel documents. In October 2022, South Korea confiscated the two original passports.
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