👨⚖️Do Kwon Pleads Not Guilty to Terra Ecosystem Collapse During US Cryptocurrency Trial
After a lengthy battle, Terraform Labs co-founder Do Kwon was granted extradition to the United States by Montenegrin authorities in late December. On January 2, Do Kwon appeared in court in the United States but pleaded not guilty to fraud charges related to the $40 billion collapse of the TerraUSD (UST) stablecoin.
Do Kwon was questioned by U.S. District Judge Robert Lehrburger in Manhattan and agreed to remain in detention without bail.
Currently, Do Kwon faces nine charges, including wire, securities, and commodities fraud, all related to his role in bringing down the company after the price of Terraform Labs tokens LUNA and UST plummeted.
Back in March 2023, Do Kwon was arrested in Montenegro for attempting to travel using a fake passport. Since then, he has remained in Montenegro while U.S. and South Korean authorities have been fighting over who to charge him. Both countries have accused him of fraud, with South Korea seeking his extradition due to his citizenship.
Do Kwon had tried to avoid extradition to the United States through legal means, as South Korea generally imposes lighter penalties for financial crimes. However, the Constitutional Court of Montenegro rejected his appeal on December 26, and a few days later, the Montenegrin Minister of Justice signed an extradition order. On December 31, Montenegrin police handed Do Kwon over to US authorities at Podgorica International Airport.
Now, New York prosecutors accuse Do Kwon of misleading investors about the capabilities and adoption rate of the Terra blockchain, which directly led to the catastrophic collapse of the platform.
Notably, the Manhattan U.S. Attorney's Office, which successfully prosecuted FTX co-founder Sam Bankman-Fried last year, is also handling Do Kwon's case.
Do Kwon was previously found liable by a U.S. jury in a civil fraud case brought by the U.S. SEC and agreed to a $4.47 billion settlement, after which Terraform Labs had to file for bankruptcy.
Do Kwon’s lawyer declined to comment after the hearing. Meanwhile, the next court session is scheduled for January 8, and this case could set the stage for a high-profile cryptocurrency trial in the Southern District of New York.
As Do Kwon’s case continues to unfold in court, it is not only his personal battle, but also the focus of close attention from the entire cryptocurrency world.
