Crypto Allegations Unfold: Kwon's Legal Battle

Martin Walker
Aug 19, 2023 at 05:02 pm

In March of this year, an incident unfolded in Montenegro where Kwon was apprehended while trying to journey to Dubai using falsified credentials.

Recent developments reveal that a judge in the United States has sanctioned the Securities and Exchange Commission (SEC) to engage the South Korean government's assistance in interrogating Daniel Shin, one of the co-founders of Terraform Labs, alongside Do Kwon.

In a ruling handed down by US District Judge Jed Rakoff, it was determined that the SEC is entitled to employ a procedure outlined in a 1970 international evidence-gathering treaty. Despite Kwon's assertion of innocence, he did not put up any resistance against the SEC's request.

In connection with the motion approved by Judge Rakoff, the SEC has expressed intentions to procure evidence from Chai Corp., a payments company headquartered in Seoul and established by Kwon.

This maneuver forms part of the SEC's larger strategy to substantiate the claims laid out in the legal action directed at Terraform and its former CEO. The lawsuit, filed by the SEC in February, alleges that TFL and Kwon were involved in a substantial fraudulent scheme related to crypto asset securities, encompassing the now-defunct algorithmic stablecoin TerraUSD, alongside other purported crypto securities.

The relationship between Chai and Terra has raised eyebrows, with several reports suggesting potential exaggeration on Kwon's part regarding the nature and duration of the collaboration between Terra and the e-commerce platform.

A rather surprising accusation from the SEC contends that Chai Payments deviated from using the Terraform blockchain to handle payments as stipulated in the 2019 partnership agreement. Instead, the defendants supposedly imitated Chai payments on the Terraform blockchain to create an illusion of alignment, when in reality, the payments were processed through conventional channels.

Apart from the SEC's lawsuit, Kwon is also grappling with criminal charges both in the United States and South Korea. The disgraced executive had previously asserted that the charges laid against him by prosecutors in his home country were driven by political motives.

Read more about

Related News

Sign up for daily crypto news in your inbox

Get crypto analysis, news and updates right to your inbox! Sign up here so you don't miss a single newsletter.