The long-awaited trial of Do Kwon, former CEO of Terraform Labs, has been set. Hearings are set to begin in January 2026 in the United States, a legal process seeking to clarify the facts following the $40 billion collapse of his Terra/LUNA ecosystem in 2022.
The trial is shaping up to be one of the most important in recent cryptocurrency history, with charges that could see Do Kwon face up to 130 years in prison.
Extradition and legal challenges
Do Kwon's extradition from Montenegro to the United States was completed on December 31, 2024, following a final decision by Montenegrin legal authorities. This marked the beginning of a judicial process that has been delayed due to the complexity of the evidence presented.
According to prosecutors, the analysis of six terabytes of data, along with the decoding of four phones handed over by Montenegrin authorities, has created significant challenges. In addition, the translation of crucial documents from Korean has added another layer of difficulty.
During a recent hearing in Manhattan, lead prosecutor Jared Lenow explained that encrypted information on the devices remains a major obstacle. This evidence will be crucial to moving the case forward.
Serious accusations
Do Kwon faces a nine-count indictment, including securities fraud, wire fraud, commodities fraud, and conspiracy to commit money laundering. These charges stem from the massive loss suffered by investors following the collapse of Terra/LUNA, considered one of the most devastating events in the cryptocurrency world.
The case has been compared to the trial of FTX founder Sam Bankman-Fried, another controversial figure in the sector. However, the accusations against Do Kwon are far more serious, with a greater financial and human impact. While Bankman-Fried is currently serving a 25-year prison sentence, Kwon could face an even harsher trial if convicted.
Years of legal difficulties
Prior to his extradition, Do Kwon and Terraform Labs had already faced legal action. In June 2024, the company reached a settlement with the U.S. Securities and Exchange Commission (SEC). This agreement included the payment of $4.47 billion in penalties, of which $3.6 billion was in refunds, $420 million in civil penalties, and $467 million in pre-judgment interest.
On a personal level, Do Kwon was forced to pay more than $200 million, including $110 million in refunds and $80 million in civil penalties. These figures reflect the magnitude of the damage caused by the collapse of Terra/LUNA and the losses suffered by thousands of investors.
A case that will set a precedent
Do Kwon’s trial will not only attract the attention of the crypto industry, but will also set a precedent for future legal cases involving blockchain and DeFi projects. Backed by massive evidence, including a 79-page indictment detailing new charges, this trial will be one of the most thorough and complex ever seen in the cryptocurrency space.
The community will be watching closely how the proceedings develop and what this case will mean for regulation and governance in the world of cryptocurrencies. For investors and developers, the outcome could redefine the rules of the game in the future.
