Terraform Labs founder Do Kwon has asked a United States federal court through his lawyers to reject the Securities and Exchange Commission’s (SEC) appeal to question him. Kwon is serving a jail term in Montenegro after being convicted for traveling to the country on forged documents.
The SEC sued Terraform Labs in February for allegedly misleading the investors about the safety of their investments in TerraUSD stablecoin. TerraUSD, which offered up to 20% yields, was pegged to its sister coin, Luna, through an algorithmic mint-burn system.
TerraUSD creators had assured the investors that the token would keep its peg with USD. But, in May 2022, both coins crashed, wiping nearly $50 billion in market value.
Last week, the SEC asked the court for permission to question Kwon before the case’s discovery cut-off date of October 13 is lapsed.
As per media reports, a Wednesday court filing revealed Kwon’s lawyer opposed the SEC request in the US District Court for the Southern District of New York for a testimony by the Terraform Lab’s founder.
The lawyers argued that bringing Kwon to the US would be “impossible” as he is in an indefinite detention in Montenegro. They also opposed the possibility of written testimony by Kwon because it would violate his due process rights.
“An order mandating something impossible serves no practical purpose and risks undermining judicial authority,” Kwon’s lawyers said in the court filing.
