SEC Delays Trial Against Terraform Labs and Former Executive

SEC Delays Trial Against Terraform Labs and Former Executive

The U.S. Securities and Exchange Commission (SEC) has recently announced that it will be delaying the trial against Terraform Labs and its former top executive. This decision comes after the regulator deemed it appropriate to accommodate the co-founder, Do Kwon, who intends to attend the trial. Originally scheduled for January 29, the trial has been rescheduled to April 15, with the SEC acknowledging the need for a “modest” delay.

Do Kwon, who has agreed to extradition from Montenegro, is expected to arrive in the United States by mid-March. His participation in the trial is a significant factor in the SEC’s decision to postpone the proceedings. Kwon’s lawyers previously sought a trial delay to March 18, a month earlier than the date suggested by the SEC. However, Kwon’s lawyer clarified that no further adjournments would be sought if Kwon is unable to attend. Ultimately, Judge Jed Rakoff will have the final say in granting the request for a trial delay.

In its most recent filing, the SEC expressed its opposition to conducting separate trials for Terraform Labs and Do Kwon. The regulator argues that the cases are nearly identical, making separate trials inefficient due to the need for repeat testimony. This position aligns with the SEC’s preference for a unified trial process.

According to Reuters, the source of this information, details about the court filing are not publicly available at the moment. Neither the SEC nor Terraform Labs have made any official statements regarding the trial delay, leaving speculation about the ongoing proceedings.

The SEC initially charged Terraform Labs in February 2023, accusing the crypto company of committing billions of dollars’ worth of fraud. While the case remains ongoing, there have been significant developments. In December, a judge issued summary judgments that favored both Terra and the SEC on separate issues, albeit before the conclusion of the case.

Do Kwon currently serves a prison sentence in Montenegro for passport fraud. His sentence is expected to end by February 15, which means he could potentially be released just in time for his extradition to the United States for the upcoming trial.

As the trial against Terraform Labs and its former top executive faces a delay, the outcome and implications of these proceedings remain uncertain. While the SEC and Terraform Labs refrain from public comments at this stage, the possibility of a unified trial and Do Kwon’s attendance will shape the future developments in this significant case.

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