Do Kwon’s Terraform Labs Collapse: Estimated 1 Million Victims Worldwide
U.S. Prosecutors Reveal Extent of Global Impact
In a recent court filing, U.S. prosecutors estimated that the collapse of Terraform Labs, co-founded by Do Kwon, may have affected over 1 million victims globally. This revelation was made on January 6, 2025, in a New York City court, where Kwon is facing nine felony counts related to fraud.
The Case Against Do Kwon
Kwon’s legal troubles began after the Terra ecosystem collapsed in 2022, resulting in billions of dollars in losses for investors and contributing to the broader downturn of the cryptocurrency market. Following his arrest in Montenegro in 2023 on unrelated charges, Kwon was extradited to the United States in December 2024 after prolonged negotiations involving multiple jurisdictions, including South Korea.
Victim Notification and Rights
In the court filing, the government outlined its intention to notify victims of their rights under the Justice for All Act of 2004. Due to the vast scale and global extent of Terraform Labs’ dissolution, traditional methods of notification were deemed impractical. Instead, the government proposed establishing a public website for Kwon’s case proceedings to ensure compliance with victim rights, including timely notification of public court proceedings, the opportunity to be heard during sentencing or plea agreements, and the right to restitution if applicable.
The Estimated Number of Victims
The government’s filing stated that while it is challenging to precisely quantify the number of victims, “the Government estimates that the number of victims, in this case, exceeds hundreds of thousands of individuals and entities, and potentially totals more than one million.” This estimate is based on the sheer number of purchases and sales of Terraform’s cryptocurrencies, as well as the manner of those transactions, which often occurred on foreign exchanges and through digital asset wallets or crypto trading accounts without personal identifying information.
Conclusion
The collapse of Terraform Labs has had far-reaching consequences, affecting an estimated 1 million victims worldwide. As the case against Do Kwon progresses, the government’s victim notification website is expected to play a significant role in ensuring transparency and acknowledgment of the harms suffered. The website will provide a platform for victims to exercise their rights under the Justice for All Act, marking a crucial step towards accountability and restitution.
Source: Crypto.news
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