Do Kwon, the South Korean businessman behind the failed cryptocurrencies TerraUSD and Luna, will appear in Manhattan federal court on Thursday, facing a serious charge. criminal fraud charges.
This follows his recent release from Montenegro, where he has been they are caught more than a year after trying to use false travel documents at the country’s Podgorica airport.
Is Kwon Facing Criminal Charges In The US
Kwon’s legal troubles stem from his tragic fall digital currencies by 2022, resulting in an estimated loss of $40 billion for investors.
The SEC and the Manhattan US attorney’s office allege that Kwon misled investors about the stability of TerraUSD, a stablecoin that is said to maintain a value of $1. The failure of TerraUSD, along with its sister token Luna, caused a broader decline in the cryptocurrency market, impacting established digital assets such as Bitcoin (BTC).
Federal prosecutors in Manhattan charged him with multiple charges, including securities fraud, wire fraud, securities fraud, and conspiracy. However, Do Kwon has always denied any wrongdoing, insisting that he has been transparent about the performance of his products.
In a significant development last June, Kwon agreed to pay an $80 million fine to the US Securities and Exchange Commission (SEC) as part of a $4.55 billion settlement. to resolve related to his company, Terraform Labs.
As part of the agreement, Do Kwon also accepted a ban on future cryptocurrency sales. Despite this, Kwon’s legal challenges are far from over, as he faces the possibility of criminal prosecution in the US justice system.
During a trial in April, a federal judge found Kwon and Terraform Labs guilty of defrauding investors. Closing arguments from Terraform’s legal team argued that Kwon was honest about his products, even though they failed. However, Do Kwon was not present at the trial due to his detention in Montenegro.
A Critical Review of Cryptocurrency Regulation?
As a Bitcoinist reportMontenegro’s Justice Minister, Bojan Božović, signed an extradition order for Kwon last week, rejecting South Korea’s request for his return. The decision came after a legal dispute involving extradition requests from the US and South Korea for more than a year.
Do Kwon joins a growing list of cryptocurrency executives facing legal consequences following the 2022 market crash.
Notable figures include Sam Bankman-Fried, the founder of the collapsed FTX exchange, who is currently serving a 25-year prison sentence. defrauding customersand Alex Mashinsky, the former CEO of Celsius Network, who recently pleaded guilty to fraud charges.
As Kwon prepares for his court appearance, the outcome could have significant implications for the future of cryptocurrency regulation and investor protection.
The courtroom drama is poised to garner a lot of attention, not just because of Kwon’s high profile but also because of the wider impact his case could have on the fast-moving digital currency landscape.
At the time of writing, Terra’s Luna Classic (LUNC) token is trading at $0.0001148, up 1.2% in the 24-hour period.
Featured image from DALL-E, chart from TradingView.com