Per a report from crypto news outlet CoinDesk, the founder of the failed ecosystem Terra (LUNC, formerly known as LUNA), Do Kwon, was denied an appeal on its 4-month sentence. The Montenegro High Court issued a statement upholding its decision over the charges brought up for falsifying an identity document by Kwon.
Do Kwon Faces Months In Prison, Extradition Likely?
According to the report, Do Kwon and his associate Han Chan-Joon received the sentence from the Montenegro High Court over 6 months ago. Then, their legal defenses tried to appeal the sentences, but the court found the petition “unfounded,” in today’s statement.
As CoinDesk noted, both Kwon and his colleague have been in the custody of Montenegro authorities since their arrest. The Terraform Labs founder could get extradited to South Korea to face charges related to the collapse of the Terra ecosystem.
In 2022, the crash in LUNA began a series of bankruptcy proceedings for entities with capital tied up within the ecosystem. Companies like hedge fund Three Arrows Capital, crypto lender Celsius, and even crypto exchange FTX suffered from the aftermath of the Terra fallout.
Retail investors suffered the most, as over $40 billion evaporated from the sector, triggering a wave of suicides across the world. A recent report from CoinDesk noted that the 4-month jail sentence is “adequate” for Kwon, but the crypto founder could face many more years if extradited to South Korea or the United States.
As Bitcoinist reported last week, Kwon received another negative from a key institution. The United States Securities and Exchange Commission (SEC) reinforced its stance against Terraform Labs and its co-founder by seeking to dismiss their motion to drop the lawsuit filed in February 2023.
The SEC accuses the crypto firm of “deceiving” investors by “falsely” promising exuberant gains, alleging that Terraform Labs misled the public with incomplete transparency regarding their crypto asset securities.
The SEC’s request to the District Court for the Southern District of New York emphasizes the purported indisputable evidence of violations of securities laws by Do Kwon and Terraform. This move by the regulator is marked by submitting seven filings, countering all the defendants’ motions and pleas.
The SEC’s determined approach aims to challenge Terraform’s legal defenses and unravel the truth behind the alleged illicit crypto transactions within the firm.
As the lawsuit progresses, its outcome looms large over the crypto industry. The conclusion of this legal battle is expected to significantly influence the regulatory landscape and market dynamics within the crypto space, potentially setting precedents for how crypto firms operate.
As of this writing, LUNC trades at $0.0008 with some gains over the week.
Cover image from Unsplash, chart from Tradingview