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Terraforms Labs’ Do Kwon Faces Over 1 Million Victims in US Fraud Case

Published by
Debashree Patra

The collapse of Terraform Labs continues to make waves globally, with prosecutors estimating that its co-founder, do kwon , 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.

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.

With billions lost, the Terraform Labs scandal will forever echo as one of crypto’s darkest chapters.

FAQs

What is happening with Do Kwon?

Do Kwon faces nine fraud charges in the U.S. after the Terra ecosystem collapse, defrauding over 1M people. His trial begins January 2025.

Debashree Patra

Fun-loving and cheerful, a passionate blockchain and crypto writer who knows no boundary…connect if you share the same passion. With 10+ years of writing experience, I am a Crypto Journalist by chance, exploring, and learning all the dynamics of the sci-fi action-filled crypto world. Currently, focusing on cryptocurrency news and price data. With a passion for research and challenging my capabilities, I am slowly getting into the crypto arena to bring new insights every day.

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