Terraform and its co-founder, Do Kwon are currently facing extradition proceedings in Montenegro, and the firm on the other hand is entangled in a trial. As the trial got underway in a federal courtroom on Thursday, the news has continued to catch the attention of analysts worldwide.
Do Kwon, a co-founder of Terraform, is concurrently awaiting extradition procedures in Montenegro. Authorities are requesting Kwon’s extradition in order to prosecute him in the United States because of claims of misconduct with Terraform’s operations.
Analysis of the development claims that the result of the extradition process will affect Kwon and Terraform profoundly, possibly influencing the company’s and its executives’ future course. The Security and Exchange Commission (SEC) accused Kwan of facilitating fraud that cost the company $40 billion of investors’ funds and had contributed to the collapse of the FTX exchange as well.
Do Kwan’s Court Ruling Co-incidence with Bankman-Fried Sentence Date
Terraform filed for Chapter 11 bankruptcy protection in January, claiming it was unable to pay the fines that federal regulators had demanded. A federal court judge will sentence Sam Bankman-Fried, the CEO of cryptocurrency exchange FTX, who was found guilty in November of major fraud, on the same day as Terraform’s trial.
Bill DiSomma, the Jump Crypto co-founder, and the president, Kanav Kariya, will be called upon as witnesses in the next court sitting. However, neither Jump nor its management have been accused of any crime in this case.
Other prospective witnesses in the case would be Evgeny Gaevoy, the CEO of Wintermute Trading Ltd., and Marina Gurevich, the Chief Operating Officer (COO). Terraform management believes that the decision by Wintermute in 2022 to short down TerraUSD contributed to the second issue it had.
The Implications of Terraform’s Position in the Cryptocurrency Industry Explained
Bob Van Voris, an industry analyst with Bloomberg News, has commented that as the company seeks clarification on the regulatory environment and legal norms governing cryptocurrency enterprises, investors, regulators, and industry participants will be keenly monitoring the trial’s result and the extradition process.
Bob Van had warned that the decision made in these proceedings will have a significant impact on Terraform, its stakeholders, and the cryptocurrency market as a whole, determining the direction the industry will go in the future.
Terraform had announced that its digital assets don’t pose any security risk known to law. He added that the SEC doesn’t have the legal jurisdiction to handle the case the way it is currently going. Terraform has also announced that it will be appealing the latest judgment anytime soon.
Terraform Insists it’s Product is Safe, Kwon Awaits Proper Sentence
Jed Rakoff, the United States District Judge who’s also overseeing the ongoing civil trial, ruled in December that Terraform is responsible for selling illegal securities. The ruling is in line with the SEC’s major elements of the case and completely disassociates it from the list of problems the jury would have to deal with.
Recall that Kwon was apprehended in Montenegro one year ago when he was trying to ‘escape’ to Dubai using a private jet. He was later sentenced to four months for attempting to escape the country using a fake passport.
Kwon is currently waiting to be sent to where he will serve his sentence. At the moment, his legal team is working to send him to South Korea, where sentences of this nature are less harsh compared to what’s obtainable in the United States.
However, Rakoff delayed the Kwon trial sometime in January for two months, on Kwon’s instructions. This was in hopes that his extradition process may be speeded up to meet up with the trial in South Korea. The report has it that Do Kwon owns 92% of the company’s equity. Meanwhile, the said case is not expected to commence until Kwan arrives the United States, as that’s what’s obtainable in regulator’s civil suits.
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