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South Korean cryptocurrency entrepreneur Do Kwon has denied fraud charges in a US court. Kwon, known for his involvement with TerraUSD and Luna, is accused of being responsible for a near $40 billion loss in value for these altcoins in 2022. Recently extradited from Montenegro, Kwon is facing nine charges in Manhattan.
Charges Against Kwon
Kwon is being prosecuted for crimes such as fraud and money laundering in a US court. The indictment claims he manipulated investors with misleading statements. It is alleged that Kwon used an algorithm to maintain TerraUSD’s peg to one dollar but secretly purchased millions of dollars from a trading company.
Prosecutors stated that these deceptive claims directed investors toward Terraform Labs products, which inflated Luna’s value to $50 billion in early 2022. However, when TerraUSD began to lose value in May 2022, Kwon’s manipulation efforts proved inadequate, leading to a significant crash. This resulted in a drop in the value of many cryptocurrencies, including Bitcoin 
$105,740, causing widespread chaos in the market.
Current Legal Proceedings
Last June, Kwon reached a $4.55 billion settlement with the SEC, which barred him from cryptocurrency trading. The SEC alleged that Kwon misled investors in 2021 and secretly supported TerraUSD’s value. Additionally, Kwon has been in custody since March 2023 for possessing fake documents in Montenegro and was handed over to the US last week.
According to prosecutors, Kwon’s misleading strategies were exposed following TerraUSD’s collapse in 2022. Moreover, Terraform Labs declared bankruptcy earlier this year. Despite Kwon’s denial of the charges, expectations regarding the case’s outcome remain uncertain, with the next hearing scheduled for January 8, 2025.
Kwon is among the cryptocurrency leaders facing trial following the market downturn in 2022, joining figures like Sam Bankman-Fried and Alex Mashinsky.
