Judge Sets Pretrial Deadline In SEC’s Suit Against Terra As Do Kwon’s Extradition To US Looms

The presiding judge in a lawsuit playing out in the U.S. District Court for the Southern District of New York between the Securities and Exchange Commission and Terraform Labs — creator of the ill-fated UST and Luna cryptocurrencies — is progressing with new pretrial deadlines that have been set.

This comes as a court in the tiny Balkan nation of Montenegro ruled that it will honor the U.S. prosecution’s request to deport Terraform Labs co-founder and former CEO Do Kwon to face criminal fraud charges.

SEC v. Terra: Pretrial Deadline Set

Judge Jed Rakoff has signed an order granting the proposed order setting pretrial deadlines.

The legal teams for the SEC and Terra attorneys have until March 11 to submit final oppositions to motions, depositions, and counter-designations. The two parties have agreed to a trial postponement to March 25. Notably, the district judge has ordered the regulator and Terra to serve any new motions in limine on or before Feb. 26, 2024.

More crucially, Judge Rakoff instructed the two parties to jointly file a proposed Pretrial Consent Order no later than March 18.

“The SEC shall provide to defense counsel draft(s) of the joint sections of the proposed Pretrial Consent Order on or before March 8, and the Defendants shall respond to the SEC’s draft(s) within five days of receipt,” the court filing reads.

Alleged Crypto Crook Do Kwon Headed To U.S.

Judge Rakoff’s order comes amid news that Montenegro has decided to extradite fallen crypto star Do Kwon to the United States rather than to his native South Korea.

According to a Wednesday report from Montenegrin news outlet Pobjeda, the High Court of Podgorica made the decision to deport Kwon to the U.S. and rejected South Korea’s request to extradite him.

The extradition decision followed an appeal by Kwon’s defense attorneys, contending that Montenegro’s Justice Minister Andrej Milovic had the final say regarding which country would extradite the South Korean crypto mogul — a claim the high court rebuffed.

The Terraform co-founder was arrested in Montenegro last March while trying to travel to Dubai on a falsified passport, after which he was found guilty and sentenced to four months in jail.

Kwon is under indictment in his home country because of the notorious depegging of Terraform Labs’ algorithmic stablecoin UST in May 2022, which sank the crypto market into a deep winter and forced several crypto projects with exposure to the project to declare bankruptcy.

The U.S. SEC’s lawsuit against Terra and Kwon accuses them of “orchestrating a multi-billion dollar crypto asset securities fraud.” That means the disgraced crypto tycoon could also be on the hook for disgorgement and multi-million dollar penalties.