Do Kwon Fights SEC Extradition Request Over Terra and Luna Stablecoin Collapse
Do Kwon, founder of Terraform Labs, is fighting a U.S. Securities and Exchange Commission (SEC) request to extradite him for questioning about the collapse of his stablecoins Terra and Luna, according to court documents filed on Wednesday.
The filing, submitted to the U.S. District Court for the Southern District of New York, indicates that Kwon's legal team is opposing any attempt to bring him to the U.S. for testimony.
Kwon is currently detained in Montenegro and his lawyers assert that extradition is "impossible" under these circumstances. They also argue that submitting written testimony to the SEC would infringe upon Kwon's due process rights under American law.
In February, the SEC filed a lawsuit against Terraform Labs, claiming the company had misled investors about the security of its TerraUSD stablecoin. The stablecoin was designed to offer returns of up to 20%, promising investors that it would maintain its peg to the U.S. dollar through a mint-burn mechanism linked to its sister coin, Luna.
Following the cataclysmic crash of both TerraUSD and Luna in May 2022, which led to a $60 billion loss in Terra's ecosystem's market value, the fallout rippled through the broader cryptocurrency market. The cascade of events not only depressed Bitcoin's price, but also caused a chain reaction that would swiftly evaporate $300 billion in value across the entire cryptocurrency sector.
The SEC has expressed urgency in questioning Do Kwon, asking the court for permission to proceed before the discovery cut-off date of October 13.
Kwon's lawyers, however, have pushed back, stating in the filing, "An order mandating something that is impossible serves no practical purpose and risks undermining judicial authority."
Since the crash of
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