The U.S. Attorney’s Office has filed an additional charge against Terraform Labs co-founder Do Kwon following his extradition from Montenegro: money laundering conspiracy.
On January 2, the U.S. District Court for the Southern District of New York unsealed a superseding indictment in which U.S. Attorney Damian Williams charged Kwon with conspiracy to launder money.
According to U.S. prosecutors, the Terraform co-founder facilitated more than $10,000 in transactions on the platform "knowing that the property involved in certain financial transactions represented the proceeds of some form of illegal activity."
Do Kwon’s superseding indictment was unsealed on January 2. Source: Courtlistener
The money laundering charges are part of an alternative indictment that was not initially included in the eight counts against Kwon in March 2023. Prosecutors submitted the indictment under seal in May 2024, and the judge ordered it unsealed when Kwon appeared in court on January 2.
Kwon is said to have been involved in the collapse of the Terra ecosystem in 2022, and he was arrested in Montenegro in 2023 for using forged travel documents. U.S. and South Korean authorities have made competing petitions for the extradition of the Terraform co-founder, but Montenegrin authorities did not decide on his legal status until December 2024, at which point Kwon was handed over to U.S. officials.
Trial or plea agreement?
The Terraform co-founder appeared in court on January 2, pleading not guilty to all charges and agreeing to be detained. It is still unclear whether U.S. authorities will consider a plea agreement or intend to proceed with a criminal trial.
Kwon's case is similar to that of former FTX CEO Sam Bankman-Fried—the latter being another cryptocurrency executive who was under the jurisdiction of another country (the Bahamas) before being extradited to the U.S. In SBF's case, his lawyers were able to argue that the campaign finance charges added in the alternative indictment should be dismissed because they were not part of the extradition request.
Bankman-Fried was later convicted of seven felony counts and sentenced to 25 years in prison, but he has appealed.
Another key industry figure—former Binance CEO Zhao Changpeng—pleaded guilty to a charge and was sentenced to four months in prison in 2024.
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