Although the US has yet to win the extradition victory against South Korea for Do Kwon, a New York court has already ruled against the fallen former crypto mogul in a legal case launched by the Securities and Exchange Commission.

Do Kwon and his crypto brainchild – Terraform Labs – were found guilty of misleading investors in the 2022 crash.

The Terra collapse from two years ago was among the loudest in the cryptocurrency industry, which resulted in an investor loss of around $40 billion. This unfolded when unknown actors found a way to explore the project’s algorithmic stablecoin UST, and the other native token – LUNA.

Kwon, the founder and majority owner of Terraform Labs, went on the run but was finally captured in Montenegro last year when trying to escape the country with a fake passport.

Since then, the US and South Korea have been in a constant battle about his future extradition, and the Asian country currently has the advantage.

At the same time, a Bloomberg report informed that a New York jury consisting of seven people ruled against Kwon and Terraform in a legal case filed by the SEC last year.

The case in question was regarding the claim from Kwon and Terraform that Chai, a popular Korean payment app, had employed the project’s blockchain network to facilitate transactions. The jury further decided that Kwon and his crypto company lied to investors about the stability of UST.

“For all of crypto’s promises, the lack of registration and compliance have very real consequences for real people. As the hard work of our team shows, we will continue to use the tools at our disposal to protect the investing public, but it is high time for the crypto markets to come into compliance,” – commented SEC’s enforcement director, Gurbir Grewal.

Terraform’s legal team said they were “very disappointed with the verdict,” as they did not believe it was “supported by the evidence.” They have doubled down on a previous assertion that the SEC “does not have the legal authority to bring this case at all.”

This is among the few court victories the SEC has gained against a crypto company, after its losses against Grayscale and Ripple in 2023.