The trial against Terraform Labs and its former top executive has been delayed by the U.S. Securities and Exchange Commission (SEC), according to Reuters. This delay comes as a result of Terraform Labs’ co-founder, Do Kwon, expressing his intention to attend the trial. Kwon has agreed to extradition from Montenegro and could potentially arrive in the U.S. by mid-March. The trial, originally scheduled for Jan. 29, has been pushed back to April 15.
News of Kwon’s efforts to delay the trial initially surfaced on Jan. 11 when his lawyers requested a delay until March 18, almost one month before the SEC’s suggested date. However, Kwon’s lawyer clarified that further adjournments would not be sought if Kwon is unable to attend. It is worth noting that Judge Jed Rakoff, presiding over the case, still needs to decide whether to grant the request despite both parties reaching an agreement.
The SEC, in its recent filing, noted its opposition to holding separate trials for Terraform Labs and Kwon. The regulator argued that the cases are essentially identical, and having two separate trials would unnecessarily involve repeat testimony. Reuters, citing an unavailable court filing, reports this development. Notably, neither the SEC nor Terraform Labs have commented on the situation.
As a recap, Terraform Labs faced charges from the SEC in February 2023 for allegedly perpetrating billions of dollars’ worth of fraud in the crypto industry. While the case remains ongoing, a judge issued summary judgments in favor of both Terraform Labs and the SEC on separate issues in December. These developments suggest that Kwon, currently serving time in Montenegro for passport fraud, may be released before his extradition for the upcoming trial, as his sentence is expected to end on Feb. 15.
Overall, the delay in the trial against Terraform Labs and its former top executive showcases the significance of Do Kwon’s presence and participation. With his intent to attend and the subsequent agreement to delay the trial, the judicial process will await Kwon’s arrival. However, there remains the question of whether the requested delay will be granted by Judge Jed Rakoff. Furthermore, the SEC’s opposition to separate trials emphasizes the similarities between the cases and highlights the logistical challenges of conducting two separate trials. As the legal proceedings unfold, the crypto community eagerly awaits the outcome and the potential implications it could have for the industry.
