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South Korean cryptocurrency mogul Do Kwon made his first appearance in a Manhattan courtroom on Tuesday after the co-founder of bankrupt Terraform Labs was extradited from Montenegro to face criminal charges in the United States.
The new indictment unsealed Thursday adds money laundering to the original eight charges against Kwon announced last year, including securities, commodity and wire fraud, in connection with the 2022 collapse of Terraform Labs. Added new charges. Luna token.
The latest indictment alleges that Kwon, 33, made numerous false disclosures and lied to investors, regulators and on social media about various crypto products and platforms associated with Terraform Labs. There is. The charges cover alleged conduct from 2022 to April 2024 and refer to wire and virtual currency transfers in excess of $10,000 as “property derived from crime.”
“The financial world that Mr. Kwon built was built on lies and manipulative and deceptive techniques used to mislead investors, users, business partners, and government regulators about Terraform’s business,” the indictment states. “It was done.”
“Behind the scenes, the core Terraform product does not function as advertised by Mr. Kwon, but is manipulated to work to attract investors and create the illusion of a decentralized financial system. ” he added.
The collapse of the TerraUSD coin caused an unprecedented crash in the cryptocurrency market and sparked a South Korean investigation into Mr. Kwon. He had previously been charged with fraud and violating capital markets laws in his home country, and an international manhunt was launched after authorities were unable to locate him.
Kwon was eventually arrested in Montenegro in 2023 after it was discovered that he was attempting to use a fake Costa Rican passport to travel to the United Arab Emirates, which does not have an extradition treaty with the United States. U.S. criminal charges against him were dismissed hours later.
Montenegro handed over Kwon to U.S. officials and FBI agents at the airport in the capital Podgorica on Tuesday. South Korea had also requested his extradition.
Kwon has previously denied wrongdoing and pleaded not guilty during a brief court hearing Thursday. Kwon’s lawyer did not respond to a request for comment.
If convicted on all charges, he could face up to 130 years in prison. His next court appearance is scheduled for January 8th.
U.S. Attorney General Merrick Garland said on Thursday, “As alleged in court documents, Mr. Do Kwon will now face charges in U.S. courts over Terraform’s cryptocurrency, which has caused investors more than $40 billion in losses. He will be held accountable for the elaborate planning involved.”
TerraUSD is one of the largest stablecoins, a crypto token pegged to a real asset. In this case, it is the US dollar at the time of the collapse.
The collapse of TerraUSD and its affiliated digital coin Luna virtually overnight marked the beginning of a brutal year for cryptocurrencies, culminating in the fall of FTX and its founder Sam Bankman Fried in late 2022. reached. Mr. Bankman Freed was convicted of fraud charges that are still pending. He has appealed a 25-year prison sentence he received in March 2024 for stealing $8 billion from crypto customers.
Mr. Kwon and Terraform Labs were found responsible for fraud in April in a civil suit brought by the Securities and Exchange Commission, and the regulator in June ordered the company and Mr. Kwon to pay a $4.5 billion fine in a settlement. Secured. TerraForm Labs filed for Chapter 11 bankruptcy protection in January.