Do Kwon Loses Bid to Block SEC From Seeking Singapore Records

Chris Dolmetsch, Bloomberg News

Do Kwon, co-founder and chief executive officer of Terraform Labs, in the company's office in Seoul, South Korea, on Thursday, April 14, 2022. Kwon is counting on the oldest cryptocurrency as a backstop for his stablecoin, which some critics liken to a ginormous Ponzi scheme. , Bloomberg

(Bloomberg) -- The SEC can seek records from the Singapore Monetary Authority as part of the US regulator’s lawsuit against Terraform Labs and founder Do Kwon, a judge ruled.

US District Judge Jed Rakoff at a hearing on Friday denied Kwon and Terraform’s request for an order forcing the Securities and Exchange Commission to withdraw its request for documents in the Singaporean regulator’s possession from the defendants and Luna Foundation Guard, a fund established to raise money for the sole purpose of keeping the TerraUSD stablecoin worth $1, according to court records.

The SEC sued Kwon and Terraform in February, alleging they offered and sold unregistered securities and carried out a scheme that wiped out at least $40 billion worth of market value when the stablecoin collapsed. Kwon, who was arrested in Montenegro in March after several months on the run from authorities in his native South Korea, has also been charged with fraud by US prosecutors in New York.

Kwon’s US lawyer, Stephen Senderowitz, didn’t immediately respond to a request for comment on Monday. The SEC also didn’t immediately respond to a request for comment.

It’s not clear what records the SEC is seeking from Singapore, but Terraform was based in the island nation. The police there said in March that they had launched a probe into the stablecoin’s collapse. This year’s crypto rout dealt a setback to Singapore’s earlier embrace of the potential of blockchain technology and spurred a tougher regulatory stance.

Both the US and South Korea are currently seeking Kwon’s extradition from Montenegro. South Korean prosecutors on Monday confirmed a report they were investigating a transfer of funds by Kwon to a top Seoul law firm before Terra’s collapse.

The case is Securities and Exchange Commission v Terraform Labs Pte Ltd., 23-cv-1346, US District Court, Southern District of New York.