Do Kwon, the South Korean entrepreneur behind the failed cryptocurrencies TerraUSD and Luna, is ready to look in a Manhattan federal court docket on Thursday, going through critical prison fraud expenses.
This follows his current extradition from Montenegro, the place he had been detained for over a yr after trying to make use of falsified journey paperwork on the nation’s Podgorica airport.
Do Kwon Faces Felony Expenses In The US
Kwon’s authorized troubles stem from the catastrophic collapse of his digital currencies in 2022, which resulted in an estimated lack of $40 billion for traders.
The SEC and the Manhattan US Lawyer’s workplace allege that Kwon misled traders concerning the stability of TerraUSD, a stablecoin purported to take care of a worth of $1. The failure of TerraUSD, together with its sister token Luna, triggered a broader downturn within the cryptocurrency market, impacting established digital belongings like Bitcoin (BTC).
Federal prosecutors in Manhattan have charged him with a number of counts, together with securities fraud, wire fraud, commodities fraud, and conspiracy. Nonetheless, Do Kwon has constantly denied any wrongdoing, asserting that he acted transparently concerning the workings of his merchandise.
In a major improvement final June, Kwon agreed to pay an $80 million civil advantageous to the US Securities and Trade Fee (SEC) as a part of a $4.55 billion settlement associated to his firm, Terraform Labs.
As a part of the settlement, Do Kwon additionally accepted a ban on future cryptocurrency transactions. Regardless of this, Kwon’s authorized challenges are removed from over, as he faces the potential for prison penalties within the US judicial system.
Throughout a civil trial in April, a federal jury discovered Kwon and Terraform Labs accountable for defrauding traders. Closing arguments from Terraform’s authorized crew contended that Kwon had been truthful about his merchandise, whilst they failed. Nonetheless, Do Kwon was absent from the trial as a consequence of his detention in Montenegro.
A Essential Check For Cryptocurrency Regulation?
As Bitcoinist reported, Montenegro’s Minister of Justice, Bojan Božović, signed the extradition order for Kwon final week, rejecting South Korea’s request for his return. This determination got here after a authorized battle that concerned extradition requests from each the US and South Korea for over a yr.
Do Kwon joins a rising record of cryptocurrency executives going through authorized repercussions following the market’s downturn in 2022.
Notable figures embrace Sam Bankman-Fried, the founding father of the collapsed FTX alternate, who’s presently interesting a 25-year sentence for defrauding prospects, and Alex Mashinsky, former CEO of Celsius Community, who lately pleaded responsible to fraud expenses.
As Kwon prepares for his court docket look, the result may have vital implications for the way forward for cryptocurrency regulation and investor safety.
The courtroom drama is poised to attract appreciable consideration, not solely as a consequence of Kwon’s high-profile standing but in addition due to the broader impression his case might have on the quickly digital forex panorama.
On the time of writing, Terra’s Luna Basic (LUNC) token is buying and selling at $0.0001148, up 1.2% within the 24-hour time-frame.
Featured picture from DALL-E, chart from TradingView.com