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- The trial against Terraform Labs and Do Kwon begins in NYC post-prison release.
- SEC accuses Kwon of fraud over TerraUSD collapse, sparking $40B loss.
- As the NYC trial unfolds, the US and South Korea are fighting for his extradition.
In a pivotal moment for the cryptocurrency world, the trial against Terraform Labs and its founder, Do Kwon, commences in New York City today.
💥 GM CryptoX – 2 x important dates for the bad boys of crypto
🔸 Today is the start of Do Kwons US 🇺🇸 #SEC trial
🔸 Thursday sees the sentencing of former #FTX CEO
Sam Bankman Fried #SBF pic.twitter.com/XhJ0Mv3Rvb— RR2Capital (@RR2Capital) March 25, 2024
Interestingly, the developments follow Kwon’s release from prison in Montenegrin, setting the stage for a legal battle that has captured international attention.
Do Kwon’s trial jury selection already underway
The trial, spearheaded by the United States Securities and Exchange Commission (SEC), revolves around allegations stemming from the dramatic collapse of Terraform Labs’ TerraUSD stablecoin in May 2022.
With losses exceeding $40 billion in market value, the SEC has accused Kwon of orchestrating a fraudulent scheme, manipulating the price of TerraUSD to deceive investors.
Kwon faces charges of violating registration and anti-fraud provisions under the Securities Act and the Exchange Act.
While civil trials typically result in financial penalties rather than imprisonment, the outcome of this case carries significant implications for cryptocurrency regulation.
US and South Korea locked in a legal battle for Do Kwon’s extradition
As the trial unfolds, both the US and South Korea are embroiled in a legal tug-of-war over Kwon’s extradition.
South Korea initiated the pursuit following Kwon’s alleged violation of national markets law, prompting a nearly year-long international manhunt.
Kwon’s eventual arrest in Montenegro in March 2023, on charges of document forgery, marked a turning point in the legal saga.
The arrest and subsequent imprisonment in Montenegro were followed by several legal battles as Do Kwon’s legal team fought his extradition out of the country. The public was treated to back and forth as the High Court issued extradition orders which were almost immediately overturned in the many appeal cases.
Do Kwon was finally released from prison over the weekend. However, despite his release, officials have barred Kwon from using his passport, raising speculation about his next moves.
The unresolved extradition debate adds further complexity to the case, leaving the timing and location of Kwon’s potential extradition uncertain.
The collapse of TerraUSD, once hailed as a stablecoin innovation, sent shockwaves through the cryptocurrency ecosystem, underscoring the need for regulatory scrutiny.
With prominent figures like Kwon and FTX founder Sam Bankman-Fried facing legal repercussions, the industry faces a reckoning on transparency and accountability.
The outcome of the NYC trial will undoubtedly shape the future landscape of digital finance, as authorities seek to uphold investor protection and maintain market integrity.