Do Kwon pleads not guilty to US charges with maximum penalty of 130 years in prison

Do Kwon pleaded not guilty to nine counts of fraud in a New York federal court on Thursday, according to Reuters.

The Department of Justice alleges that the co-founder of Terraform Labs deliberately misrepresented his crypto empire to investors and customers, including how his so-called stablecoin TerraUSD operated, according to a newly unsealed indictment.

“We secured this extradition despite Kwon’s alleged attempt to cover his tracks by laundering proceeds of his schemes,” Attorney General Merrick Garland said in a statement.

If convicted on all charges, Kwon faces a maximum penalty of 130 years in prison, according to the DOJ.

His lawyers did not immediately respond to a request for comment.

Extradition battle

Kwon’s appearance in New York follows an almost-two-year-long dispute over his extradition from Montenegro.

In March 2023, Montenegrin authorities arrested the former crypto mogul in a private jet after a six-month international manhunt. He travelled with a fake Costa Rican passport.

He was slated to fly to the city of Dubai in the United Arab Emirates, which doesn’t have an extradition treaty with the US.

The US and his native South Korea battled over which country would prosecute Kwon.

In December, the US finally won out, and the Terraform Labs co-founder arrived in the States on New Year’s Eve, said the DOJ.

TerraUSD

When crypto was booming in 2021 and early 2022, Kwon was one of the industry’s biggest stars.

His stablecoin, TerraUSD, had a circulating supply of almost $19 billion at its height, according to CoinGecko.

And a linked cryptocurrency called Luna was worth more than $40 billion.

“I am the master of stablecoins,” Kwon posted on X in May 2022.

However, just days later, TerraUSD depegged from the US dollar, and Kwon’s crypto empire suddenly collapsed.

Although Kwon tried to resuscitate Terraform Labs, he eventually saw the writing on the wall.

The DOJ alleges that he tried to launder more than $60 million of investors’ money in September to pay for his and his company’s expenses.

Terraform Labs filed for Chapter 11 bankruptcy in January 2024.

Crypto market movers

• Bitcoin is up 0.6% over the past 24 hours to trade at $96,289.
• Ethereum is also up 0.5% over the same period to $3,433.

What we’re reading

• Tether opens 2025 with an ally in the White House and more than $5bn in profits ― DL News
• Top 5 fastest growing apps ― Milk Road
• What is DeSci? And why’re Vitalik CZ backing it? ― Milk Road
• As Solana Rivalry Heats Up, Coinbase’s L2 Sets New Records for Addresses and Transactions — Unchained
• Crypto’s court docket in 2025 is packed with big cases — here’s a rundown ― DL News

Ben Weiss is DL News’ Dubai Correspondent. Got a tip? Email him at bweiss@dlnews.com.