Do Kwon Pleads Not Guilty in US Over Terra Crash of 2022

by

As a seasoned crypto investor who has weathered numerous market storms and witnessed the rise and fall of various digital assets, I find myself closely following the legal saga unfolding around Do Kwon, co-founder of Terraform Labs. The events surrounding TerraUSD’s collapse in 2022 were undeniably a turning point for the crypto ecosystem, with far-reaching implications that even contributed to the downfall of prominent players like FTX.

The legal battle between Kwon and various authorities is reminiscent of a high-stakes game of cat and mouse, spanning continents and involving strategic maneuvers that could make any thriller novelist proud. The fact that Kwon, with such a substantial stake in Terraform, now faces prosecution from the Manhattan US attorney’s office, mirroring the fate of FTX’s Sam Bankman-Fried, adds an intriguing layer to this tale.

However, I can’t help but chuckle at the irony that Kwon, who once boasted about his ability to outsmart regulators and authorities, now finds himself in the very courtrooms he sought to avoid. As they say, pride comes before a fall! In the world of crypto, it seems the tables can quickly turn, and those who claim to be invincible are often the ones who fall hardest.

In the end, it’s a stark reminder that in this rapidly evolving landscape, compliance and transparency should never be overlooked. The crypto market may be volatile, but the law is as constant as ever. As an investor, I always strive to learn from such events, not just to protect my own investments, but also to help the ecosystem grow responsibly and sustainably.

33-year-old Do Kwon, a co-founder of Terraform Labs, denies all allegations in a Manhattan courtroom concerning the collapse of Terra in May 2022. Kwon maintains his innocence, asserting that he did not orchestrate the $40 billion plummet of the TerraUSD stablecoin.

On Thursday, I appeared before Magistrate Judge Robert Lehrburger, where my legal team agreed to my detention without bail, given the numerous charges against me. These charges encompass wire fraud, securities fraud, and commodities fraud.

On Thursday, I stood before Magistrate Judge Robert Lehrburger, with my attorneys agreeing to my detention without bond due to the multitude of accusations I’m facing. These charges range from wire fraud to securities and commodities fraud.

This legal dispute signifies the culmination of almost two years of debate over where Kwon would initially be brought to justice, between the U.S. and South Korea. Following his apprehension in Montenegro in March 2023 for using a fake passport, he was recently extradited to the United States.

In early 2022, both New York and Seoul have accused Kwon due to the collapse of Terraform’s TerraUSD, which had a massive impact on the cryptocurrency market. The consequences of this event were one of the key factors leading to the downfall of the crypto exchange FTX.

Kwon, who owns nearly all (92%) of Terraform, is currently being pursued for legal action by the Manhattan District Attorney’s office – the same authority that previously prosecuted Sam Bankman-Fried from FTX, leading to a 25-year prison sentence following his conviction on seven charges.

As a crypto investor, I find myself in a troubling situation following allegations by prosecutors that Kwon has misrepresented the potential and adoption of the Terra blockchain to us investors. After the recent court hearing, his legal representative declined to issue a statement, with the next hearing scheduled for January 8th.

Previously, Kwon had been avoiding the South Korean authorities for a period of several months. However, his escape plans were thwarted when he and Terraform’s ex-CFO were arrested at Podgorica airport in Montenegro as they tried to leave for Dubai. They both received a four-month sentence due to using fake documents.

Following his apprehension in Montenegro, a prolonged legal dispute between the U.S. and South Korea unfolded, with initial inclinations leaning towards US extradition due to strategic partnerships, despite multiple courts favoring South Korea’s extradition petition. Kwon himself has expressed his desire to be sent back to South Korea, where punishments for financial crimes are typically less severe.

While Kwon was in Montenegro, both he and Terraform were found guilty of civil fraud by the United States Securities and Exchange Commission (SEC). Following this ruling, Terraform agreed to pay a large sum of $4.47 billion to settle the SEC’s allegations. However, after making this payment, Terraform subsequently filed for bankruptcy.

Read More

2025-01-03 00:20