US prosecutors stated that Do Kwon manipulated the TerraUSD and Luna cryptocurrency ecosystem, causing $40 billion in losses to investors, and that the number of victims could exceed one million.
Prosecutors in the US have alleged in a criminal case filed against former Terraform Labs CEO Do Kwon that the collapse of the TerraUSD and Luna cryptocurrencies could affect more than a million people. Prosecutor Daniel Gitner said that it is difficult to determine the exact extent of the damage caused by Kwon, but the number of victims could exceed hundreds of thousands and reach a million. Gitner made the following statements:
“While it is difficult to determine the exact number of Kwon’s victims, given the sheer volume of Terraform Labs’ cryptocurrency transactions and the way they were traded (most transactions were made on foreign exchanges, anonymously, or through cryptocurrency wallets), the government estimates that the number of victims in this case could exceed hundreds of thousands and potentially reach one million.”
Kwon's next hearing is scheduled for January 8.
Terra's Collapse Caused $40 Billion in Losses
According to documents filed by prosecutors in court, Kwon allegedly built the Terra ecosystem using “manipulative and misleading” methods and tricked investors into accepting the system as a reliable financial structure. “As a result, investors lost more than $40 billion due to Kwon’s fraud,” the documents said.
Prosecutors said it would be impractical to provide individual information to potential victims due to the large number of cases, so they asked the court for permission to make information about the case public online.
Do Kwon, who was extradited from Montenegro to the United States last week, has pleaded not guilty to the charges in a New York court. In the U.S., Kwon faces a series of charges including commodity fraud, securities fraud, wire fraud and money laundering. If convicted on all charges, Kwon could face up to 130 years in prison.
