Do Kwon Tried, Responds To Allegations Of Crypto Fraud In US Court

Terra Luna founder, Do Kwon. (Photo; Doc. Cybernews)

JAKARTA - Terraform Labs founder, Do Kwon, faces heavy charges in Manhattan federal court after being extradited from Montenegro. Kwon, who was accused of fraud related to TerraUSD's collapse and Luna tokens in 2022, was present before US federal judge Robert Lehrburger.

In a trial held earlier this week, Kwon filed an innocent plea against nine counts, including securities fraud, cable fraud, commodity fraud, and money laundering conspiracy.

The case comes after the failure of the Terraform Labs project that rocked the crypto market, removing about $40 billion from the market value of TerraUSD and Luna.

The prosecutors accused Kwon of misleading investors by promising TerraUSD price stability which should have been maintained through an algorithm known as "Terra Protocol." However, according to prosecutors, Kwon actually made a secret agreement with a trading firm to raise TerraUSD prices artificially.

The legal process against Kwon became part of the pursuit of international authorities who lasted almost two years. In March 2023, Kwon was arrested in Montenegro while trying to escape using a fake passport.

After going through a legal process in the country, the Montenegro government decided to extradite Kwon to the United States, even though South Korea also filed a lawsuit against him.

In connection with this case, Terraform Labs was also forced to settle a civil dispute with the US Securities and Exchange Commission (SEC) by paying a fine of USD 4.55 billion (IDR 73.7 trillion) last year.

In addition, Kwon was fined 80 million US dollars (Rp1.3 trillion) and banned from being involved in further crypto activities. Kwon is scheduled to return to court on January 8, and the case is handled by the Manhattan Attorney General's Office, which previously also handled other major cases, including Sam Bankman-Fried, co-founder of FTX.