Catenaa, Friday, Janury 3, 2025- Do Kwon, co-founder of Terraform Labs, entered a not-guilty plea in a Manhattan federal court Thursday after being extradited from Montenegro earlier this week. Kwon faces multiple criminal charges, including securities fraud, market manipulation, and conspiracy to commit money laundering, stemming from the collapse of the TerraUSD (UST) stablecoin in 2022, which wiped out billions of dollars in value.
Kwon appeared in court in high spirits, reportedly smiling alongside his attorneys. His next hearing is scheduled for Jan. 8. Prosecutors allege Kwon orchestrated a financial ecosystem “built on lies,” manipulating Terraform’s products to mislead investors and regulators. The charges could lead to a maximum sentence of 130 years if Kwon is convicted on all counts, according to the U.S. Department of Justice.
The TerraUSD algorithmic stablecoin, linked to the governance token Luna, collapsed dramatically in 2022, shaking the cryptocurrency industry. U.S. prosecutors accuse Kwon of creating an illusion of a decentralized system to lure investors while concealing core product failures.
Kwon also faces civil charges from the U.S. Securities and Exchange Commission, which earlier found Terraform and Kwon liable for fraud in a separate trial.
Kwon’s extradition marks the culmination of international legal debates about jurisdiction. Montenegro agreed to transfer him to the U.S., where authorities are pressing ahead with multiple high-profile cryptocurrency cases.
