Do Kwon, the South Korean entrepreneur behind the failed cryptocurrencies TerraUSD and Luna, is about to look in a Manhattan federal courtroom on Thursday, going through critical prison fraud fees.
This follows his current extradition from Montenegro, the place he had been detained for over a 12 months after making an attempt to make use of falsified journey paperwork on the nation’s Podgorica airport.
Do Kwon Faces Felony Fees In The US
Kwon’s authorized troubles stem from the catastrophic collapse of his digital currencies in 2022, which resulted in an estimated lack of $40 billion for traders.
The SEC and the Manhattan US Lawyer’s workplace allege that Kwon misled traders in regards to the stability of TerraUSD, a stablecoin purported to keep up a worth of $1. The failure of TerraUSD, together with its sister token Luna, triggered a broader downturn within the cryptocurrency market, impacting established digital property like Bitcoin (BTC).
Federal prosecutors in Manhattan have charged him with a number of counts, together with securities fraud, wire fraud, commodities fraud, and conspiracy. Nevertheless, Do Kwon has constantly denied any wrongdoing, asserting that he acted transparently relating to the workings of his merchandise.
In a major growth final June, Kwon agreed to pay an $80 million civil superb to the US Securities and Alternate Fee (SEC) as a part of a $4.55 billion settlement associated to his firm, Terraform Labs.
As a part of the settlement, Do Kwon additionally accepted a ban on future cryptocurrency transactions. Regardless of this, Kwon’s authorized challenges are removed from over, as he faces the potential for prison penalties within the US judicial system.
Throughout a civil trial in April, a federal jury discovered Kwon and Terraform Labs accountable for defrauding traders. Closing arguments from Terraform’s authorized crew contended that Kwon had been truthful about his merchandise, at the same time as they failed. Nevertheless, Do Kwon was absent from the trial because of his detention in Montenegro.
A Crucial Check For Cryptocurrency Regulation?
As Bitcoinist reported, Montenegro’s Minister of Justice, Bojan Božović, signed the extradition order for Kwon final week, rejecting South Korea’s request for his return. This determination got here after a authorized battle that concerned extradition requests from each the US and South Korea for over a 12 months.
Do Kwon joins a rising listing of cryptocurrency executives going through authorized repercussions following the market’s downturn in 2022.
Notable figures embrace Sam Bankman-Fried, the founding father of the collapsed FTX trade, who’s at present interesting a 25-year sentence for defrauding clients, and Alex Mashinsky, former CEO of Celsius Community, who not too long ago pleaded responsible to fraud fees.
As Kwon prepares for his courtroom look, the result may have vital implications for the way forward for cryptocurrency regulation and investor safety.
The courtroom drama is poised to attract appreciable consideration, not solely because of Kwon’s high-profile standing but additionally due to the broader influence his case might have on the quickly digital foreign money panorama.
On the time of writing, Terra’s Luna Basic (LUNC) token is buying and selling at $0.0001148, up 1.2% within the 24-hour time-frame.
Featured picture from DALL-E, chart from TradingView.com
