A US federal court docket has postponed a key listening to within the case towards Terraform Labs co-founder Do Kwon after prosecutors submitted an intensive quantity of latest proof, considerably broadening the case.
In accordance with court docket filings, the standing convention, initially scheduled for March 10 within the Southern District of New York, has been pushed to April 10.
Listening to delayed
Prosecutors argued that the protection requires further time to investigate the newly offered 4 terabytes of discovery. The court docket concurred, citing the “voluminous discovery” as justification for the delay.
Courtroom paperwork point out that on Feb. 27, the US authorities handed over 600 gigabytes of proof to Kwon’s authorized workforce, together with information from his cellphones, emails, and crypto transactions.
Authorities now intend to offer a further 4 terabytes of discovery by subsequent week.
Regardless of the postponement, the jury trial stays scheduled for Jan. 26, 2026. Moreover, victims of the Terraform Labs collapse have till April 30 to submit claims for monetary losses.
The delay in Kwon’s case introduces additional complexity to an already high-profile authorized battle. With an immense quantity of discovery supplies now underneath assessment, his protection workforce should navigate a difficult course of forward of trial.
Federal prosecutors allege that Kwon knowingly misrepresented the soundness of Terraform’s ecosystem, resulting in probably the most important monetary downturns in crypto historical past.
In the meantime, Kwon continues to disclaim any wrongdoing and claims that the market downturn was unexpected quite than the results of fraudulent exercise.
SEC case
Kwon, who was extradited from Montenegro to the US on Dec. 31, 2024, entered a not responsible plea on Jan. 2 to a number of fraud-related fees. His case stems from the collapse of Terraform Labs’ algorithmic stablecoin, TerraUSD, which resulted in roughly $40 billion in investor losses in 2022.
Kwon’s extradition adopted a chronic authorized battle between authorities in Montenegro, South Korea, and the US. Terraform Labs has additionally confronted scrutiny from the Securities and Change Fee (SEC), which has accused Kwon of orchestrating a large-scale crypto fraud.
In April 2024, a jury discovered Do Kwon and Terraform Labs answerable for defrauding buyers in crypto asset securities. The SEC had argued that Kwon and his firm misrepresented the soundness of their ecosystem, resulting in important investor losses.
Following the jury’s verdict, the SEC filed a movement requesting $5.3 billion in disgorgement and civil penalties towards Terraform Labs and Do Kwon. This quantity was described as a “conservative” however “affordable approximation” of the ill-gotten features from the alleged fraud.
The court docket finally imposed a $4.5 billion wonderful on each Kwon and Terraform Labs.