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Read more: Do Kwon Extradition Case Now Set for Trial in 2025
Do Kwon appeared in a Manhattan federal court that was extradited from Montenegro earlier this week.
The Terraform Labs founder was accused of nine counts by federal prosecutors: securities fraud, wire fraud, commodities fraud, and money-laundering conspiracy. The charges revolve around the 2022 implosion of Terraform’s TerraUSD and Luna tokens, erasing close to $40 billion in market value and leaving a ripple into the cryptocurrency world.
Appearing before United States Magistrate Judge Robert Lehrburger, Kwon consented to detention without bail. Prosecutors said he misled investors about the stability of TerraUSD by making a computer algorithm – what was described as the “Terra Protocol” – that had stabilized its $1 value. Instead, prosecutors say, Kwon arranged a secret deal for a trading firm to artificially inflate its price.
The high-profile case concludes an almost two-year-long international pursuit of Kwon, who had been arrested in Montenegro back in March 2023 while attempting to travel with a forged passport. Following legal disputes, authorities of Montenegro decided to extradite the Terraform Labs founder to the U.S. instead of South Korea, which also pressed charges against the entrepreneur.
In a related civil case last year, Terraform Labs reached a $4.55 billion settlement with the U.S. Securities and Exchange Commission. Kwon had been fined $80 million and barred from crypto-related activities.
Kwon is due back in court on Jan. 8. The case is being prosecuted by the Manhattan U.S. Attorney’s Office, which has brought charges against other high-profile crypto figures, including FTX co-founder Sam Bankman-Fried.
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