SEC Nods Do-Kwon’s Trial Postponement: What’s Next?

• The SEC agrees to postpone Do Kwon’s trial to mid-March in response to Kwon’s request.
• Do Kwon’s lawyers request Judge Rakoff to push the trial to mid-March so that he could attend the trial.
• The regulators oppose Kwon’s request for separate trials for Terraform and Kwon.

In a recent development in the SEC-Terraform legal tussle, the Securities and Exchange Commission has agreed to delay the civil trial involving Terraform Labs and its co-founder, Do Kwon. The regulator’s move is in response to Do Kwon’s request for the postponement of the trial to mid-March.

In February 2023, the SEC charged Terraform Labs and Do Kwon with “orchestrating a multi-billion dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities.” Consequently, Do Kwon was arrested in Montenegro, alleging almost eight charges, including fraud and conspiracy. Held in Montenegro prison, Do Kwon’s extradition still remains a question, with recent reports hinting at his extradition to the US than to South Korea.

On January 11, Do Kwon’s lawyers sent a letter to Judge Jed Rakoff, pointing out the longer and slower extradition procedures in Montenegro. The lawyers requested the court to delay January’s trial so that Kwon could plead with the Montenegran authority to permit him to appear for the trial.

Considering Do Kwon’s request for a “modest adjournment” of the trial scheduled to begin on January 29, the SEC agreed to push the date to the second half of March. However, the SEC’s nod isn’t a final word; Judge Rakoff will decide whether to heed Do Kwon’s request.

Despite its green light for the postponement of the trial, the SEC strongly opposed Do Kwon’s request for separate trials for the company and Kwon. The SEC asserted that separate trials would be unnecessary while both Terraform and Kwon were named “defendants” in the lawsuit.