Just In: Do Kwon Pleads Not Guilty In First US Hearing After Extradition

In the latest development, Terraform Labs 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 appeared before a United States magistrate on Jan. 2, 2025, and pleaded not guilty to the charges in the first legal hearing in Manhattan since his extradition to the US.

Kwon faces several counts of securities fraud, wire fraud, money laundering charges, and commodities fraud for his role in the collapse of the Terra ecosystem in 2022, which sent shockwaves through the crypto market. An updated 79-page indictment filed on Thursday added a count of money laundering conspiracy.

Previously, he agreed to pay an $80 million civil fine and be banned from crypto transactions as part of a $4.55 billion settlement that he and Terraform reached with the U.S. SEC. 

Prosecutors Allege Kwon Of Market Manipulation

In Thursday’s indictment, the Manhattan U.S. Attorney’s office alleged Kwon misled investors in 2021 about TerraUSD, a so-called stablecoin designed to maintain a value of $1. Kwon allegedly told investors a computer algorithm known as “Terra Protocol” had restored the coin’s value when it slipped below its peg in May 2021, when in fact he arranged for a high-frequency trading firm to secretly buy millions of dollars of the token to artificially prop up its price.

Prosecutors said that false claim and others led the retail and institutional investors to buy Terraform products and boost the value of Luna, a more traditional token developed by Kwon that fluctuated in value but was closely linked to TerraUSD, to $50 billion by the spring of 2022.

TerraUSD and Luna crashed that month, while also dragging down the value of other cryptocurrencies, including bitcoin, and caused wider devastation in the crypto market. However, his defense team argued that the tokens’ collapse resulted from market dynamics rather than fraudulent activity, noting that Kwon had been transparent about investment risks.

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Prosecutors highlighted instances where Kwon’s public statements allegedly contradicted Terraform Labs’ operational realities while stressing the substantial losses suffered by investors.

If convicted on all charges, Do Kwon could face over 100 years in prison, though actual sentences are often shorter than the maximum penalties. His next court date has not been scheduled.