Terra’s Do Kwon Wants SEC Charges Dismissed, Court Filings Show

Lawyers for Do Kwon, founder of collapsed crypto issuer Terraform Labs, have requested a U.S. court to dismiss charges brought against him by the Securities and Exchange Commission (SEC) partly for lack of jurisdiction, court filings from Friday show.

Kwon, who has been on the run from regulators since the collapse of his multi-billion dollar crypto enterprise in May 2022, was recently arrested in Montenegro for attempting to travel with falsified documents. Following his arrest, the SEC charged the South Korean national with securities fraud.

In the civil action brought against Kwon, the regulator failed to prove “personal jurisdiction” as products referenced by the SEC were “available to the world and not directed at U.S. persons,” a 47-page supporting document for a motion to dismiss the charges said. It also says that a digital asset involved in the case, the stablecoin UST, does not fall under the purview of the SEC as it is a currency and not a security.

“Congress has not granted the SEC the power to regulate the digital assets at issue here,” the document, filed with a New York court said.

The company also did not conduct any public offerings of securities that warranted an SEC registration, according to Kwon’s representatives. SEC Chief Gary Gensler has been facing mounting criticism over his handling of crypto regulation, mainly through enforcement action.

Interested  SEC Is Alleging Yasal Violations ‘On the Fly,' Coinbase Says

Kwon still faces criminal fraud charges by the U.S. prosecutors as well as charges of capital markets law violations in South Korea. Both nations have requested the extradition of the former executive who must first face trial and possible jail time in Montenegro.

The SEC can oppose the motion to dismiss by May 12.

Recommended for you:

  • Crypto Markets Today: Big Options Trade in Ether Market Would Profit from 69% Price Slide
  • Why Bitcoin Mining Is a Matter of National Security
  • Crypto Derivative Volumes Saw Speedy Growth as Prices Rose in January
  • Join the Most Important Conversation in Crypto and Web3 in Austin, Texas April 26-28
Edited by Parikshit Mishra.

Comments are closed.

Verification: 3c77fa839e7c2e69