Lawyers representing Terraform Labs co-founder Do Kwon reportedly argued in court against the allegations of the United States Securities and Exchange Commission that Kwon defrauded U.S. investors by illegally offering unregistered securities.

On April 21, Kwon’s lawyers asked the judge to dismiss the SEC lawsuit, claiming that the regulator’s acquisitions were unfounded, according to a Bloomberg report. While requesting to dismiss the lawsuit, Kwon’s lawyers asserted that U.S. law prohibits regulators “from using federal securities law to assert jurisdiction over the digital assets in this case.”

In addition, the lawyers claimed the SEC failed to prove that Kwon had defrauded U.S. investors in connection with the $40 billion collapse of Terra’s TerraUSD (UST) and LUNA (LUNA). According to the lawyers, the UST stablecoin is a currency, not a security.

The legal proceedings began following Kwon’s arrested at the Podgorica airport in Montenegro on March 23 while allegedly attempting to fly to Dubai using fake documents. After his arrest, both South Korean and American authorities requested the entrepreneur’s extradition.

At the time of writing, it remains unclear which country, if any, will be granted their extradition request.

Related: Do Kwon lawyers received $7 million before Terra collapse: Report

“In the case when we receive several extradition requests, I would like to say that determining to which state they will be extradited is based on several factors like the severity of the committed criminal offense, the location and time when the criminal offense has been committed, the order in which we have received the request for extradition and several other factors,” said Montenegrin Justice Minister Marko Kovač through an interpreter on March 29.

The Seoul Southern District Court recently denied an arrest warrant for Terraform Labs co-founder Shin Hyun-Seong. While prosecutors saw Kwon’s arrest as an opportunity to pin down Shin, the court denied the request, citing the unconfirmed nature of the allegations and the unlikeliness of Shin being a flight risk or destroying evidence.

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