Trial Begins in Absentia: What Happened on the First Day of the Do Kwon Case?
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Trial Begins in Absentia: What Happened on the First Day of the Do Kwon Case?
The trial is expected to last two weeks, with nine jurors selected in court, none of whom hold cryptocurrency.
Navigating Web3 tides with focused insightsBy: Zack Guzmán
Translated by: Frank, Foresight News
Editor's note: Manhattan regulators in the United States began trial proceedings on Monday local time against Terra and its co-founder Do Kwon. However, Do Kwon was absent from the trial as he had been transferred on March 23 to a "reception center" for foreigners in Montenegro, awaiting final extradition decisions.
The U.S. Securities and Exchange Commission (SEC) lawsuit against Do Kwon/Terra officially opened today at a Manhattan courtroom in the United States. This article compiles excerpts from opening statements made by the jury, the U.S. SEC, and the defense team—along with some notably humorous remarks provided by Judge Rakoff.
This is my first return to court since the SBF trial, and I noticed far fewer people than during the SBF case—I arrived late but still found a seat.
But the most obvious difference: everyone in the courtroom was wearing suits.
Jury Selection
Judge Rakoff set basic rules from the outset:
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The entire trial is expected to last two weeks;
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Objections are limited to no more than four words;
"The only way you can make me angry is by quickly raising an objection. You just say three words: Objection, lack of foundation. Well, maybe I can tolerate stretching it to four words."
Both sides engaged in minor debate over how to explain Do Kwon’s absence from the trial, until Judge Rakoff asked: "Do you really want me to say he's unavailable because he's overseas? That might prompt speculation from the jury."
The defense agreed (it is widely known that Do Kwon is serving time for passport forgery and remains in Montenegro).
Jury selection began. As both sides learned more about potential jurors, they alternated in dismissing candidates (Foresight News note: courts randomly select from local residents several times more candidates than needed; each candidate is briefly informed about the case background and undergoes around 30 minutes of questioning by lawyers and the judge. The judge seeks jurors who can remain neutral, fair, and open-minded during trial, making judgments based on evidence and law. Lawyers also prefer such jurors, but will exclude those whose preconceptions may be unfavorable to their client).
Initially, there were many female candidates. In the end, the first jury panel consisted of six women and three men, most of whom were minorities:
Among the three men, one was divorced, one is currently involved in an ongoing personal injury lawsuit, and another has a girlfriend.....None of them owned cryptocurrency, which perhaps explains why the divorced juror wore a New York Giants NFL jacket (Foresight News note: FTXZ once aired commercials during the NFL Super Bowl).
Judge Rakoff joked that he too was a Giants fan—"That's why I'm dressed in black, because I'm mourning." The joke brought laughter throughout the courtroom, though the appearance of a New York sports reference in a trial involving a Korean company left Korean media quite confused.
Interestingly, one man said he had spent thousands of dollars on Bitcoin and Ethereum but never invested in any Terra-related tokens, yet he was still rejected from serving as a juror; another woman said she previously served on a jury for a counterfeit money case where the defendant couldn't be convicted due to lack of intent—but ironically, she too was dismissed from jury duty this time.
Opening Statements
In his opening remarks, Judge Rakoff clearly outlined the key issues:
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Did Terraform Labs (TFL) misleadingly use Chai to represent Terra?
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Did TFL mislead investors about why UST was pegged to the U.S. dollar?
Each side was given 30 minutes for their opening statements.
The SEC spoke first, but their argument was almost a direct copy-and-paste from the Department of Justice's case against SBF and FTX, especially the opening and closing lines, which were nearly word-for-word identical:
"This is a case about fraud." "This trial is not about technology."
The defense’s opening statement drew directly from content disclosed by Do Kwon in previous interviews: "Failure does not equal fraud" (See related reading: Interview with the Founder of Terra: I Bet Everything, But This Time I Lost).
The defense attorney concluded with strong criticism of the SEC’s selective use of facts and mockery of witness testimony, while affirming that Chai indeed used Terra.
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