Do Kwon’s lawyers have reportedly challenged the claims made by the US Securities and Exchange Commission (SEC) that accused the Terraform Labs co-founder of defrauding US investors by offering unregistered securities.

On April 21, Kwon’s legal team requested the judge to dismiss the lawsuit, stating that US law prohibits regulators from asserting jurisdiction over digital assets in the case.

Furthermore, the lawyers claimed that the SEC could not prove that Kwon had defrauded US investors regarding the $40 billion collapse of the TerraUSD (UST) and Luna (LUNA) cryptocurrencies.

The lawyers contended that the stablecoin at issue is a currency and not a security. The legal proceedings began after Kwon’s arrest in Podgorica airport, Montenegro, on March 23.

Kwon’s extradition request remains in question as South Korean and American authorities have made separate requests.

Recently, the Seoul Southern District Court denied the arrest warrant for Terraform Labs co-founder Shin Hyun-Seong, citing unconfirmed allegations and the unlikeliness of Shin being a flight risk or destroying evidence.