While Do Kwon's trial has been postponed for 1 year, details about the "unique case" have been surprising.
Terraform Labs founder Do Kwon has made his second court appearance in the US District Court for the Southern District of New York on charges related to the collapse of failed algorithmic stablecoin TerraUST. If convicted, Kwon could face up to 130 years in prison.
Kwon has pleaded not guilty to nine felony charges of fraud. He was previously extradited to the United States after legal proceedings in Montenegro and is expected to face similar charges in South Korea.
The case is being heard in the same court where high-profile names from the crypto world such as FTX founder Sam Bankman-Fried and Celsius CEO Alex Mashinsky are being tried.
During the “first hearing” on Wednesday, U.S. District Judge Paul Engelmayer announced that the trial will begin on January 26, 2026, and called on the parties to consider settlement talks.
$40 Billion Collapse and Allegations
TerraUST, developed under Kwon’s leadership, caused a chain reaction of bankruptcies across the crypto world, wiping out a market value of around $40 billion in 2022. But the criminal case focuses on misleading statements Kwon made about the system, which prosecutors described as a “Potemkin village.”
Prosecutor Jared Lenow said Kwon collaborated with an outside firm (allegedly Jump Crypto) to maintain TerraUST’s stability and continued to assure the public otherwise despite knowing the system was vulnerable.
“Unprecedented” Process and Technical Barriers
Kwon’s lawyers requested at least a year to prepare for the case. Judge Engelmayer said such a long preparation period was “unprecedented in his tenure” but granted the request. Prosecutors also said they found the period reasonable.
The US government said it would take time to examine six terabytes of evidence submitted for the case and to decrypt the four phones, social media accounts and other encrypted information Kwon had in prison in Montenegro.
He also added that some data may have been collected without permission and that crypto keys appear to have “gone missing.”
Stay tuned