Terraform Labs co-founder Do Kwon appeared in court on Jan. 2 in the US and pleaded not guilty to fraud charges linked to the $40 billion implosion of the TerraUSD (UST) stablecoin, Bloomberg News reported.
Kwon was brought before US Magistrate Robert Lehrburger, in Manhattan. Kwon agreed to stay in custody and not be released on bail. He faces nine charges, including wire, securities, and commodities fraud, stemming from his alleged role in Terraform Labs’ collapse after the price of its tokens, LUNA and UST, crashed.
Kwon, who was arrested in Montenegro while trying to travel with a false passport in March 2023, remained in Montenegro during the tug of war between US authorities and South Korean officials over where Kwon would be charged. Kwon had been accused by both countries of fraud. South Korea has sought extradition for his nationality.
Kwon also appealed for the extradition of Kwon to South Korea, where financial crimes are punished less severely.
Montenegro’s Constitutional Court Rejecting the Appeal on Dec. 26 and the country’s Justice Minister subsequently Signing an Order The co-founder of Terraform Labs was extradited a couple days later.
The Montenegrin Police Department celebrated its 31st anniversary on December 31, Transfer Kwon US Authorities at the Podgorica International Airport
In the waiting for trial
Prosecutors in New York allege Kwon misled investors about the Terra blockchain’s capabilities and adoption rates, claiming his actions directly contributed to the platform’s catastrophic collapse.
The Manhattan US Attorney’s Office, which successfully prosecuted FTX co-founder Sam Bankman-Fried last year, is leading the case against Kwon.
Kwon already faces legal implications. The Securities and Exchange Commission brought a civil case against him and Terraform Labs, and a US jury found them liable. A $4.47 Billion Settlement. Terraform filed for bankruptcy.
Kwon’s attorney declined to comment after the hearing. On January 8, a follow-up conference will be held, setting the scene for a potentially high-profile trial in cryptography for the Southern District.
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