Do Kwon claims SEC questioning cannot happen in the US, but it can in Montenegro.
Legal representatives for Do Kwon, the co-founder of Terraform Labs, have filed a motion urging a US federal court to dismiss a questioning request from the US Securities and Exchange Commission (SEC).
The regulatory agency seeks to question Kwon in the United States about the collapse of the Terra ecosystem.
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However, Kwon's attorneys lodged the motion on September 27th, stating that their client is detained in Montenegro and has "no scheduled release or extradition date." Consequently, they argue that it would be "impossible" to meet the SEC's deadline for questioning in the United States by October 13th.
In particular, in the filing, Do Kwon's legal team stated:
An order mandating something that is impossible serves no practical purpose and risks undermining judicial authority.
Interestingly, Kwon himself has not outright rejected the idea of testimony. He has specified, however, that it would have to occur in Montenegro, where he is currently out on bail. In addition, Kwon's lawyers maintain that supplying written testimony would violate his right to due process under American law.
Regarding the SEC's ongoing case against Terraform Labs and Kwon, the final date for discovery has been set for October 13th. Moreover, a Montenegrin court has hinted at the possibility of holding a hearing on October 13th or 26th. Kwon might be asked questions about the SEC's investigation during this hearing.
However, the SEC has suggested they might find this arrangement "inadequate" and potentially seek another deposition post the discovery cut-off date.
The SEC initially filed a lawsuit against Kwon and Terraform Labs on February 16th, accusing them of "orchestrating a multi-billion dollar crypto asset securities fraud."
Kwon and Terraform Labs' CFO Han Chang-Joon were detained in Montenegro in March 2023. They were charged with using fraudulent travel documents while attempting to flee the country.
The legal saga involving Do Kwon and the SEC continues to unfold with new complexities. While Kwon is open to a deposition, his current legal circumstances make it "impossible" for him to comply with the SEC's request for an in-person appearance in the United States. With a looming discovery deadline and mounting allegations, it remains to be seen how both parties will navigate the intricacies of this high-stakes case.
