Not Guilty: Do Kwon Testifies in a U.S. Court

Alongside the FTX debacle, it was the most dramatic collapse in the crypto market in 2022: Terra Luna and the UST stablecoin imploded, dragging more than $40 billion into the abyss.

Alongside the FTX debacle, it was the most dramatic collapse in the crypto market in 2022: Terra Luna and the UST stablecoin imploded, dragging more than $40 billion into the abyss.

Do Kwon, the South Korean founder of Terraform Labs, was arrested in Montenegro in March 2023 after traveling on a forged passport. A tug-of-war then emerged between South Korea and the United States over the extradition of the 33-year-old, who is also facing criminal charges in his home country.

Kwon himself hoped for extradition to South Korea, where penalties for financial crimes are typically lighter. However, on January 2 he was extradited to the United States.

The crypto entrepreneur is among the charges including laundering and intentionally misleading investors. According to Kwon, an algorithm allegedly restored the value of the UST stablecoin when it fell below its peg in May 2021. In reality, he reportedly enlisted a trading firm that specializes in high-frequency trading to secretly buy millions of dollars worth of tokens to push up the price.

For the federal court in Manhattan, Do Kwon has now given a statement through his attorney, but he pleads "not guilty".

The former Terraform Labs chief is currently in pretrial detention; his attorney declined to seek bail. On January 8, the next court hearing for Kwon is scheduled.

A New York jury last year held him and Terraform Labs liable for fraud by the SEC. After the verdict, the crypto company was willing to pay $4.47 billion to settle the SEC case, but has since filed for bankruptcy.