The preliminary court date for the alleged financial misconduct case involving Do Kwon, a key figure and ex-CEO of Terraform Labs, has been provisionally scheduled for January 2026 in the U.S. courts.
The timeline accounts for the processing of six terabytes of data as part of the discovery phase.
A Mountain of Evidence Against Do Kwon
At a court proceeding in Manhattan, the prosecution emphasized substantial setbacks stemming from difficulties in evaluating the evidence. It appears that the prosecution is working diligently to decode four phones provided by Montenegrin officials and interpret crucial papers written in Korean.
The main challenge in obtaining data from these devices, as pointed out by the lead prosecutor, Jared Lenow, continues to be decrypting the information. Phones involved in the case were provided upon Kwon’s extradition to the United States on December 31, 2024.
Last week, Do Kwon pleaded not guilty to a multi-count indictment, which contains nine separate charges. These charges encompass allegations of securities fraud, wire fraud, commodities fraud, and money laundering conspiracy.
These allegations come from the $40 billion collapse of the Terra/LUNA ecosystem in 2022.
According to journalist Zack Guzmán, Terra Founder Do Kwon could potentially spend up to 130 years behind bars if the charges against him, outlined in a 79-page indictment by the DOJ, prove true. Unlike the SBF/FTX case, this one has a more significant impact on crypto projects and DeFi pioneers as it directly pertains to their activities.
On New Year’s Eve, the extradition of Kwon was officially completed when Justice Minister Bojan Bozovic granted the U.S. request. This action was taken because the U.S. legal system was deemed more appropriate to handle this case compared to South Korea.
In a parallel development, Kwon’s trial is anticipated to resemble that of Sam Bankman-Fried at FTX, but the accusations against Kwon are graver, and the number of affected parties is significantly greater than in the case of the FTX failure.
Currently, Bankman-Fried is incarcerated for a term of 25 years. If found guilty in the upcoming trial next year, the founder of Terraform Labs may receive a harsher sentence.
In June 2024, Terraform Labs entered into an agreement with the Securities and Exchange Commission (SEC). As part of this settlement, the company was obligated to pay a total of $4.47 billion in penalties. This sum consisted of a $3.6 billion fine for disgorgement, a $420 million civil penalty, and $467 million in interest accrued before the judgment was made.
Additionally, Kwon was mandated to personally cover a sum exceeding $200 million, which includes a payment of $110 million for disgorgement, $80 million as civil fines, and an additional $14.3 million for accrued interest.
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2025-01-09 00:37