Terraform Labs Co-Founder Do Kwon Pleads Not Guilty to Fraud in U.S. Court

Do Kwon, co-founder of Terraform Labs, appeared in a U.S. court on January 2, pleading not guilty to fraud charges tied to the $40 billion collapse of the TerraUSD (UST) stablecoin.
Facing nine charges, including wire and securities fraud, Kwon remains in custody without bail as he awaits trial in New York.
Kwon’s legal troubles began with his arrest in Montenegro in March 2023 for attempting to travel on a fake passport. A months-long battle over his extradition followed, with both the U.S. and South Korea seeking to prosecute him for fraud. Montenegro ultimately approved his transfer to the U.S. after rejecting Kwon’s appeal to remain, citing less severe penalties in his home country.
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Prosecutors allege Kwon misled investors about the capabilities of the Terra blockchain, contributing to its dramatic collapse. His case is being handled by the Manhattan U.S. Attorney’s Office, which previously prosecuted FTX’s Sam Bankman-Fried. In addition to the criminal case, Kwon and Terraform Labs were found liable in a civil fraud lawsuit, leading to a $4.47 billion settlement.
With a follow-up hearing scheduled for January 8, Kwon now faces one of the most high-profile cryptocurrency trials in recent history.