dokwon

* Freshly extradited from Montenegro, Terraform Labs co-founder Do Kwon pleaded not guilty to U.S. criminal charges over Terra's collapse.
Alleged crypto crook Do Kwon pleaded pleaded not guilty in a New York court Thursday to U.S. criminal charges over the 2022 collapse of the Terra crypto ecosystem, following his extradition earlier this week from Montenegro.
Feds hit the 33-year-old disgraced tech entrepreneur with nine criminal counts, including securities fraud, wire fraud, commodities fraud, and conspiracy to commit money laundering. He agreed Thursday to be held without bail before U.S. Magistrate Judge Robert Lehrburger, Inner City Press reported.
Kwon founded Terra, a once-sizable crypto ecosystem with apps built around the LUNA token and the TerraUSD (UST) algorithmic stablecoin. The project was popular with investors, and rapidly grew to become the second-biggest blockchain in the sphere after Ethereum by early 2022.
[Do Kwon is flipping through the superseding indictment - then tutns to his second lawyer]
Judge: How do you plead?
Not guilty [through counsel Chesley who adds, We consent to detention without prejudice
Its native cryptocurrency, LUNA, was in its prime as one of the top digital assets by market cap. Kwon made a lot of money, very quickly, and even mocked "poor" people on X (formerly known as Twitter).
But Terra collapsed in May 2022, taking $40 billion of investors' money with it. The crash led to a brutal bear market, as many crypto projects with exposure to the project later declared bankruptcy.
The project's main product, the UST stablecoin, couldn't keep its stable peg to the dollar, resulting in the entire ecosystem collapsing and losing nearly all of its value in a matter of days.
Authorities in both the U.S. and South Korea now allege that the entrepreneur was a scammer who conned investors into buying his cryptocurrency.
Behind the scenes, core Terraform products did not work as Kwon advertised, and were manipulated to create the illusion of a functioning and decentralized financial system in order to lure investors," Thursday's indictment reads.
Kwon was arrested in Montenegro last year for allegedly attempting to travel on a fake passport. His lawyers kept him in the country until Tuesday, when he was finally extradited to the United States.
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April 10, 2025 – A pivotal day looms for the Terra Classic ($LUNC ) and TerraClassicUSD ($USTC ) communities, as Terraform Labs co-founder Do Kwon is scheduled to appear at a U.S. court hearing that could significantly influence the ongoing legal proceedings surrounding the 2022 collapse of the Terra ecosystem. The outcome of this hearing may not only determine the trajectory of Kwon’s legal case but also have lasting implications for the future of the Terra Classic network.

Legal Developments: Proceedings Under Scrutiny

The U.S. District Court in New York had previously postponed Kwon’s hearing at the request of federal prosecutors. However, recent reports suggest that further delays may be imminent, as authorities are actively gathering new evidence, potentially affecting the timeline and scope of the trial.

Investor Compensation: $442 Million Relief Fund in Motion

In a parallel development, Terraform Labs continues to address investor losses stemming from the 2022 LUNA and UST collapse. The company has allocated up to $442 million for compensation efforts.

To be eligible for compensation, claimants must provide proof of holding LUNA or UST during the time of the collapse. This is typically done by retrieving transaction histories from the platforms where the tokens were held. Notably, even users who received post-collapse LUNA airdrops qualify for the compensation, as they are considered affected parties.

The compensation program is open globally, without geographic or exchange-based restrictions.

Do Kwon’s Legal Status: Facing Fraud Charges

Kwon currently faces nine fraud-related charges in the United States, in connection with the estimated $60 billion collapse of the Terra ecosystem. He has pleaded not guilty, and his trial is scheduled to begin on January 26, 2026, with pretrial motions due by July 1, 2025.

Following his extradition from Montenegro in December 2023, Kwon remains in the U.S. as he prepares for trial.

Regulatory Climate: Crypto Policy and Political Influence

Amid the unfolding legal narrative, broader crypto regulation has re-entered the spotlight. Speculation has intensified following former President Donald Trump’s recent decision to pardon the three BitMEX co-founders—Arthur Hayes, Benjamin Delo, and Samuel Reed—previously convicted of money laundering.

This development is widely seen as a potential indication of a more favorable regulatory approach to cryptocurrency under a possible future Trump administration. Within this context, some industry observers suggest that, if cleared, Do Kwon could still play a significant role in shaping digital finance policy—particularly given his early vision for decentralized finance and algorithmic stablecoins.

Looking Ahead: A Path Toward Redemption?

As both legal and financial proceedings inch toward resolution, optimism is cautiously emerging within the Terra community. The resolution of ongoing lawsuits and the distribution of compensation could pave the way for a renewed chapter for the Terra Classic chain—one grounded in greater transparency, community trust, and regulatory alignment.

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Do Kwon, co-founder of Terraform Labs, has been released from prison in Montenegro while the extradition proceedings regarding his request to be extradited to the USA and South Korea are still ongoing, according to a report by Bloomberg citing officials from the prison system.
Doubts Surrounding Kwon's Extradition Decision:
His recent decision to be extradited to South Korea has been challenged by the top prosecutor of Montenegro. Recently, it has come to light that the highest prosecutor's office in Montenegro has transferred this case for review to the Supreme Court, citing irregularities.
Arrest of Do Kwon and the Collapse of the Terra Project:
Do Kwon was arrested in Montenegro in March 2023 when he was caught with a fake Costa Rican passport while attempting to travel to Dubai in the United Arab Emirates. Kwon was the architect of the failed crypto project TerraUSD stablecoin, which experienced a collapse along with LUNA, another token from the Terra project.
Extradition Decision and Investigation:
Both the USA and South Korea have requested Kwon's extradition, but the Minister of Justice of Montenegro favors extradition to South Korea. This decision has been contested by the top prosecutor of Montenegro. South Korean authorities are now actively seeking to prosecute Do Kwon for his alleged frauds and tax evasion.
Do Kwon has denied the accusations, claiming that the $40 billion collapse of the Terra ecosystem was a result of market forces and does not indicate any criminal activity.
#dokwon #terraformLabs

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