Lawyers for Terraform Labs co-founder Do Kwon have asked a federal court to deny the U.S. Securities and Exchange Commission’s (SEC) request to question him in the United States over the collapse of the Terra Money ecosystem.
In a Sept. 27 filing, Kwon’s legal team said the SEC’s request to question him in the U.S. by Oct. 13 was “impossible” because he was detained in Montenegro “without a scheduled date.” date of release or extradition”.
Additionally, Kwon’s team said providing written testimony in response to the SEC’s questions would be inconsistent with his due process rights under U.S. law.
“Orders imposing impossible tasks serve no practical purpose and risk undermining the authority of justice.”
Notably, Kwon’s lawyers claimed that Kwon did not directly object to testifying, but noted that it would need to take place in Montenegro, where the UST stablecoin creator is currently out on bail.
According to the filing, the SEC’s discovery deadline for the case against Kwon and Terraform Labs is October 13.
Kwon’s legal team added that the Montenegrin court “informally” indicated that a hearing to ask Kwon’s questions to the SEC could be held on October 13 or October 26. However, the SEC noted that it may consider this proceeding to be “inadequate” and seek another deposition for Kwon after the discovery deadline.
related: U.S. Securities and Exchange Commission (SEC) seeks to question Terraform Labs co-founder Daniel Shin in South Korea
The U.S. Securities and Exchange Commission (SEC) sued Terraform Labs and Kwon on February 16, accusing them of “orchestrating a multi-billion dollar crypto asset securities fraud.”
Today, we charged Singapore-based Terraform Labs PTE Ltd and Do Hung Kwon with orchestrating a multi-billion dollar crypto-asset securities fraud involving algorithmic stablecoins and other crypto-asset securities.
— SEC (@SECGov) February 16, 2023
In the lawsuit, the SEC said Terraform and Kwon “peddled and marketed” its Anchor Protocol, which at one point was advertised as paying 20% interest on USTC deposits. It also accuses Terraform and Kwon of misleading investors about the stability of the Terra stablecoin.
Kwon and Terraform Labs Chief Financial Officer Han Chang-Joon were arrested in Montenegro in March 2023 for allegedly using false travel documents while trying to leave the country. In October 2022, their original passports were confiscated in South Korea.
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