Awaiting Do Kwon: SEC Agrees To Delay TFL CEO's $40B Crypto Fraud Case Trial

The United States Securities and Exchange Commission has agreed to postpone the civil litigation involving Terraform Labs (TFL) co-founder and CEO Do Kwon. The move seems strategically aimed at facilitating Kwon's extradition, thereby ensuring his presence during the trial.

Kwon is accused of masterminding a fraudulent scheme in the cryptocurrency sector, purportedly amounting to $40 billion.

In a filing in Manhattan federal court Monday, the SEC expressed its support for a brief postponement of the trial in the $40 billion fraud case, which is scheduled for Jan. 29.

The regulator's stance aligns with Kwon's legal representative's statement that the crypto executive intends to be present at the trial and has consented to be extradited from Montenegro to the U.S. by mid-March, Reuters reported.

The SEC also opposed two separate trials for TFL and Kwon, underscoring that the cases were virtually the same. It would unduly compel the whistleblowers and average retail investors to testify twice, which is unnecessary because of the overlap in cases, the agency said.

The decision to potentially reschedule the trial date now rests with U.S. District Judge Jed Rakoff.

The SEC proposed April 15 as the new date, citing the need to address scheduling conflicts, while Kwon's legal team requested the trial to be deferred to March 18.

During Monday's proceedings, Kwon's attorney unequivocally stated that there would be no further requests for adjournment, regardless of Kwon's ability to attend the trial on the newly suggested date.

Last week, Kwon's lawyers sought an adjournment of the SEC trial, citing procedural delays in his extradition process from Montenegro.

It also formally notified the court that the ongoing extradition process of the cryptocurrency executive in Montenegro is facing unforeseen challenges.

"Mr. Kwon wishes to attend his trial. Counsel had hoped the extradition proceedings in Montenegro would proceed more quickly than they have. Unfortunately, it now appears that Mr. Kwon is not likely to be extradited until February or March at the earliest. We understand the Court cannot put the trial on hold indefinitely, but an adjournment until mid-March would provide a realistic possibility for Mr. Kwon to attend. For these reasons, Mr. Kwon does not waive his right to attend and requests a short adjournment of the trial date to allow for his attendance," Kwon's legal team told the court last week.