Do Kwon, the co-founder of Terraform Labs, has strongly opposed the United States Securities and Exchange Commission's (SEC) request to question him in the United States regarding the Terra ecosystem's collapse.
In a filing dated September 27, Kwon's legal team asserted that the SEC's request for his questioning in the U.S. before October 13 was "impossible" due to his current detention in Montenegro, with no scheduled release or extradition date.
Furthermore, Kwon's legal representatives argued that providing a written testimony to address the SEC's inquiries would be inconsistent with his right to due process under U.S. law.
Importantly, Kwon's lawyers clarified that Kwon did not outright reject the idea of a deposition but emphasized that it would need to take place in Montenegro, where the Terra founder is presently out on bail.
As specified in the filing, the deadline for discovery in the SEC's case against Kwon and Terraform Labs is October 13.
Kwon's legal team also mentioned that a Montenegrin court had informally indicated that it might hold a hearing on either October 13 or October 26, during which Kwon would respond to the SEC's questions. However, the SEC expressed reservations about this process and suggested that it might consider it "inadequate," potentially leading to a pursuit of another deposition of Kwon after the discovery cut-off date.
The SEC's lawsuit alleges that Terraform and Kwon promoted their Anchor Protocol, which at one point promised a 20% interest rate on TerraUSD (UST) deposits. Additionally, it accuses Terraform and Kwon of misleading investors regarding the stability of Terra's stablecoin.
Kwon and Terraform Labs' chief financial officer, Han Chang-Joon, were arrested in Montenegro in March 2023 for allegedly using false travel documents when attempting to leave the country. Their original passports had been confiscated in South Korea in October 2022.
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