Do Kwon, the South Korean cryptocurrency entrepreneur behind Terraform Labs’ failed digital currencies, pleaded not guilty on Thursday to U.S. criminal fraud charges related to a $40 billion crypto collapse.
Kwon was extradited from Montenegro and faces nine-count indictment including securities fraud, wire fraud, commodities fraud, and money laundering conspiracy. The charges stem from allegedly misleading investors about TerraUSD’s value in 2021.
Prosecutors claim Kwon arranged for a high-frequency trading firm to secretly buy millions of dollars’ worth of the token to artificially prop up its price. This, they say, drove retail and institutional investors to buy more Terraform products and boost the value of Luna to $50 billion by spring 2022.
The collapse led to the loss of an estimated $40 billion in investor funds and wider chaos in the crypto market. Kwon had agreed last June to pay a $80 million civil fine and be banned from crypto transactions as part of a $4.55 billion settlement with the U.S. Securities and Exchange Commission.
Kwon’s lawyer says he will not seek bail at this time, and the entrepreneur is expected back in court on January 8. This case follows several other cryptocurrency moguls facing federal charges after a slump in digital token prices in 2022 prompted the collapse of companies.
Source: https://www.reuters.com/legal/former-crypto-executive-do-kwon-due-us-court-criminal-fraud-charges-2025-01-02