Terraform Labs co-founder Do Kwon appeared in court docket on Jan. 2 within the US and pleaded not responsible to fraud prices linked to the $40 billion implosion of the TerraUSD (UST) stablecoin, Bloomberg Information reported.
Kwon appeared earlier than US Justice of the Peace Choose Robert Lehrburger in Manhattan and agreed to stay in custody with out bail. He faces 9 prices, together with wire, securities, and commodities fraud, stemming from his alleged position in Terraform Labs’ collapse after the worth of its tokens, LUNA and UST, crashed.
After being arrested in Montenegro in March 2023 whereas trying to journey on a pretend passport, Kwon remained within the nation throughout a tug-of-war between US and South Korean authorities over the place he would face prices. Each nations had accused Kwon of fraud, with South Korea looking for extradition attributable to his citizenship.
In the meantime, Kwon appealed to keep away from extradition to the US, as monetary crime penalties in South Korea are typically much less extreme.
Montenegro’s Constitutional Courtroom rejected the enchantment on Dec. 26 and the nation’s Justice Minister subsequently signed an order to extradite the Terraform Labs co-founder just a few days later.
On Dec. 31, the Montenegrin police transferred Kwon to US authorities on the Podgorica Worldwide Airport.
Awaiting trial
Prosecutors in New York allege Kwon misled buyers concerning the Terra blockchain’s capabilities and adoption charges, claiming his actions instantly contributed to the platform’s catastrophic collapse.
The Manhattan US Lawyer’s Workplace, which efficiently prosecuted FTX co-founder Sam Bankman-Fried final 12 months, is main the case in opposition to Kwon.
Furthermore, Kwon is already going through authorized penalties. A US jury discovered him and Terraform Labs liable in a civil fraud case introduced by the Securities and Alternate Fee (SEC), ensuing in a $4.47 billion settlement. Terraform subsequently filed for chapter.
Kwon’s lawyer declined to remark after the listening to. A follow-up court docket convention is scheduled for January 8, setting the stage for what may very well be a high-profile crypto trial within the Southern District of New York.