On January 2, 2025, Terraform Labs co-founder Do Kwon stood before a US magistrate for the first time since his extradition, entering a plea of not guilty to the charges against him. The legal hearing, held in Manhattan’s Southern District of New York, marked the beginning of a high-profile case against the former tech leader.
Kwon appeared before Magistrate Judge Robert Lehrburger, where he formally denied the allegations and consented to remain in custody without bail. The charges he faces include securities fraud, wire fraud, money laundering, and commodities fraud, all linked to the catastrophic collapse of the Terra blockchain ecosystem.
The court scheduled a status conference for January 8, 2024, during which both the defense and prosecution will exchange evidence and discuss preliminary motions in preparation for the trial.
This hearing represents a significant chapter in Kwon’s ongoing legal troubles, which began in 2023 when Montenegrin courts deliberated his extradition to either the United States or South Korea.#
Extradition to the US Finalized
Montenegrin authorities had determined that Kwon met the criteria for extradition to either country. However, on December 27, Montenegrin Minister of Justice Bojan Božović approved his transfer to the United States.
In a statement, Montenegro’s Ministry of Justice outlined their decision, citing the seriousness of the alleged crimes, the locations of their occurrence, the sequence in which extradition requests were submitted, Kwon’s citizenship, and other pertinent factors.
By December 31, Montenegrin Prime Minister Milojko Spajić confirmed Kwon’s transfer to US custody. “Our nation embraces innovation in legitimate technologies such as crypto and AI, but we will not tolerate fraud,” Spajić said in a statement after the extradition.
Terraform Labs and SEC Settlement
Prior to his extradition, Terraform Labs resolved a lawsuit with the US Securities and Exchange Commission in June 2024, agreeing to a substantial settlement of $4.47 billion. This amount included $204 million in penalties attributed to Kwon’s involvement.
Kwon’s case has drawn significant attention as it underscores the growing scrutiny on crypto executives and the demand for accountability in the blockchain industry.
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