Crypto Mogul Do Kwon Pleads Not Guilty in $40 Billion TerraUSD Collapse Case
Staff Editor South Korean Crypto Mogul Pleads Not Guilty in U.S. Court
Do Hyeong Kwon, a prominent South Korean cryptocurrency entrepreneur, entered a not guilty plea in a Manhattan federal court on Thursday. The indictment against Kwon was unsealed just in time for his first court appearance, following his extradition from Montenegro two days prior.
Prosecutors allege that Kwon deceived investors from 2018 to 2022, making false claims to attract investments into Terraform Labs, a Singapore-based cryptocurrency firm. The collapse of Terraform Labs’ cryptocurrency in May 2022 resulted in a $40 billion crash, causing significant harm to global investors. TerraUSD, marketed as a “stablecoin,” was at the center of this financial disaster.
During the court proceedings, Kwon remained silent except to confirm his understanding of English. His lawyer, Andrew Chesley, entered not guilty pleas on his behalf to charges including conspiracy, commodities fraud, securities fraud, and wire fraud. An additional charge of money laundering was also included in the indictment.
Following the hearing, defense lawyers Andrew Chesley and David Patton declined to comment on the case. Kwon was returned to federal jail after his legal team agreed to his detention.
The superseding indictment provides further details of the allegations against Kwon. It accuses him of misleading investors about Terraform’s financial technologies and creating a deceptive financial ecosystem using blockchain technology. Prosecutors claim that Kwon manipulated information to present a false image of a functioning decentralized financial system.
The indictment emphasizes the use of lies and deceptive techniques allegedly employed by Kwon to mislead various stakeholders in the cryptocurrency market. As the case unfolds, it continues to draw attention to the risks and regulatory challenges in the rapidly evolving world of digital currencies.
