- Terraform Labs founder Do Kwon opposes the SEC’s request for U.S. questioning.
- Kwon’s lawyers argue it’s impossible due to his detention in Montenegro.
- SEC sued Terraform Labs over TerraUSD and Luna collapse in February.
Terraform Labs founder, Do Kwon, is pushing back against the U.S. Securities Exchange Commission’s (SEC) efforts to bring him back to the United States for questioning regarding the collapse of his stablecoin projects, Terra and Luna. In a recent court filing, Kwon has requested that a federal court deny the SEC’s request to interrogate him in the U.S.
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The court document, filed on Wednesday in the U.S. District Court for the Southern District of New York, reveals Kwon’s legal team’s strong opposition to allowing the stablecoin creator to provide testimony to U.S. regulators.
Specifically, they argue that it is “impossible” to bring Kwon to the U.S. as he remains indefinitely detained in Montenegro. Moreover, they assert that compelling Kwon to provide written testimony to the SEC would violate his due process rights under U.S. law.
Meanwhile, Kwon’s lawyers emphasize that issuing an order for something that is logistically impossible would serve no practical purpose and could undermine the authority of the judiciary.
Do Kwon Yet To Face Final Justice
In particular, the SEC had previously requested permission from the court to interview Kwon regarding the Terra/Luna collapse before the case’s discovery cutoff date, which is set for October 13.
In February, the SEC filed a lawsuit against Terraform Labs, alleging that the company had deceived investors about the safety of investing in its TerraUSD stablecoin. To specify, TerraUSD had promised investors yields of up to 20% and claimed that the token would maintain its value pegged to the U.S. dollar through a complex mint-burn system involving its sister coin, Luna.
However, both Terra and Luna experienced a catastrophic crash in May 2022, resulting in the loss of $50 billion in market value.
Ultimately, Kwon’s opposition to the SEC’s extradition request further complicates the ongoing legal battle between the regulatory agency and Terraform Labs, shedding light on the challenges of pursuing legal actions across international borders.
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