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