In January 2026, Do Kwon, co-founder of Terraform Labs, is scheduled for trial in the United States. This follows accusations of criminal fraud linked to the catastrophic crash of the TerraUSD stablecoin, which suffered losses worth approximately $40 billion in 2022. As per a ruling by U.S. District Judge Paul Engelmayer in New York, the trial is expected to last between four and eight weeks.
In March 2023, Kwon was taken into custody in Montenegro and subsequently handed over to the United States later that year. There, he faced charges for severe offenses linked to the downfall of TerraUSD stablecoin and its associated cryptocurrency, LUNA. This event sent ripples of surprise throughout the crypto sphere, which had already been shaken by a similar crash involving the FTX exchange the following month.
This high-profile case involving Kwon is generating significant interest in contemporary society because it’s connected to substantial financial losses and a contentious lawsuit. It’s important to note that aside from this American case, Kwon also faces ongoing legal proceedings in his native South Korea due to a related criminal matter.
In June 2023, Terraform Labs agreed to a $4.47 billion settlement with the U.S. Securities and Exchange Commission (SEC), following their collapse. Earlier this year, a New York court found Kwon guilty of civil fraud in a related SEC case; however, proving criminal fraud charges necessitates a significantly higher degree of evidence.
During a recent court hearing in Manhattan, the prosecution stated that the complexity of the case has been increased by encrypted data and translating materials from Kwon’s native Korean. Judge Engelmayer humorously commented on the abundance of evidence in the case, describing the distant trial date as “unusually far-off”.
As a researcher documenting legal proceedings, I find myself reporting on a case where the defendant, Kwon, has been held in custody without bail since more than two years ago. Regrettably, it appears that Kwon’s trial will not take place until 2026, marking an extended period of judicial process. The next status hearing for this case is scheduled for March 6, 2025.
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2025-01-09 11:34