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Debashree Patra
Debashree Patra
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- Jan 07, 2025 06:29 UTC
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Terraforms Labs’ Do Kwon Faces Over 1 Million Victims in US Fraud Case
Prosecutors estimate that Terraform Labs co-founder Do Kwon may have defrauded over a million people globally.
Kwon pleaded not guilty to fraud charges in the US and faces a preliminary hearing on January 8th.
The 2022 Terra collapse significantly impacted the crypto market, leading to widespread losses.
The collapse of Terraform Labs continues to make waves globally, with prosecutors estimating that its co-founder, do kwon 
do kwon Do Kwon is a cryptocurrency developer who is the Co-Founder and Chief Executive Officer of Terraform Labs. With Terraform Labs, he also founded the telecommunication company Anyfi and served as its CEO, a peer-to-peer communication solution using mesh network technology. Eventually, in 2018. He founded Terraform Labs along with his friend Daniel Shine, intending to develop a decentralized price-stable cryptocurrency such as LUNA. He successfully led the Terra Blockchain by constantly developing new blockchain technologies, products, protocols, and platforms, including anchor, prism, and mirror. Through Terraform Labs, Do Kwon developed the Terra proof-of-stake, a public blockchain built on the Cosmos SDK. He is also the founder of another failed stablecoin project, Basis Cash, an Ethereum-based token created by Nader Al-Naji. EntrepreneurDeveloper/ProgrammerChief Executive Officer 
, may have defrauded over one million people. This massive figure traces back to the Terra ecosystem’s 2022 implosion, which shook the crypto market and led to a series of bankruptcies among major firms. In the aftermath, LUNC has dropped 1.68%, currently trading around $0.0001193.
Massive Victim Count and Legal Proceedings
On January 6, Acting U.S. Attorney Daniel Gitner informed the Southern District of New York about efforts to notify victims of their rights. Traditional outreach methods have proven ineffective due to the sheer scale of the fraud and the anonymity of transactions involving foreign exchanges and digital wallets. To address this, prosecutors plan to create a dedicated website to keep victims informed about the case’s progress.
Kwon appeared in a U.S. court on January 2, 2025, following his extradition from Montenegro. He pleaded not guilty to nine felony charges, including fraud connected to Terraform Labs. Despite his plea, Kwon remains in custody as legal proceedings continue.
His preliminary hearing is scheduled for January 8, 2025, marking the next major step in this high-profile case.
The 2022 Terra Collapse
The Terra ecosystem’s collapse in 2022 wiped out billions of dollars in value, sending shockwaves across the crypto market. Kwon’s arrest in Montenegro in 2023 ended months of international pursuit, with both the U.S. and South Korea seeking his extradition.
Kwon now faces criminal charges in the same jurisdiction as disgraced crypto executives like Sam Bankman-Fried of FTX and Alex Mashinsky of Celsius. His case adds to the growing list of high-profile legal battles in the crypto world, highlighting the sector’s ongoing struggle with accountability and regulation.
In a related civil case, a US judge found Kwon and Terraform Labs guilty of fraud in April 2024, ordering them to pay $4.5 billion in penalties. Whether Kwon will strike a plea deal or proceed to trial remains uncertain, but his case underscores the devastating impact of crypto fraud on investors worldwide.
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With billions lost, the Terraform Labs scandal will forever echo as one of crypto’s darkest chapters.
FAQs
Do Kwon faces nine fraud charges in the U.S. after the Terra ecosystem collapse, defrauding over 1M people. His trial begins January 2025.
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