Do-Kwon's Terraform Labs reaches tentative agreement with US SEC, Montenegro's Supreme Court begins review of extradition laws

According to foreign media, Terraform Labs and its founder Do-Kwon Kwon have reached a tentative settlement with the U.S. Securities and Exchange Commission (SEC) regarding a fraud case. The SEC filed the civil suit in November 2021, alleging that Kwon and Terraform Labs deceived investors about the stability of Terra, causing them to lose large sums of money. According to court filings, Terraform Labs and founder Do-Hyung Kwon appear to have reached an agreement in principle with the SEC.

According to a May 30 (local time) filing, they held a conference call on May 29. The call was not recorded or transcribed, and specific terms of the settlement were not disclosed. Oral arguments have also been canceled as part of the agreement. The parties have until June 12 to file documents with the court regarding the agreement in principle. Earlier, in late April, Kwon's lawyers, who were fined $5.3 billion by the SEC, filed an opposition to the settlement, arguing that “the fine is excessive” and that “a fine of up to $1 million against Kwon is appropriate.”

Meanwhile, the Montenegrin Supreme Court will review the extradition law in the case of Terraform Labs CEO Kwon Dohyeong. The previous extradition treaty with the United States was signed in 1901 during the Kingdom of Serbia, but since Montenegro has since been unified with the Kingdom of Serbia, the idea is to see if the treaty is still valid. Under international law and Montenegrin law, it is unclear how a treaty signed more than a century ago would be interpreted, the news outlet explained. The Montenegrin Court of Appeals previously revoked Kwon's extradition order to South Korea, and it will be interesting to see if the legal review will change the country's extradition policy.