Do Kwon, the South Korean businessman behind failed cryptocurrencies TerraUSD and Luna, is scheduled to appear in federal court in Manhattan on Thursday, where he faces serious charges. Criminal fraud charges.
This follows its recent delivery from Montenegro, where it was located detained For more than a year after he attempted to use fake travel documents at the country’s Podgorica airport.
Do Kwon faces criminal charges in the United States
Kwon’s legal problems stem from his disastrous collapse Digital currencies In 2022, resulting in an estimated loss of $40 billion to investors.
The SEC and the Manhattan U.S. Attorney’s Office allege that Kwon misled investors about the stability of TerraUSD, a stablecoin that allegedly maintains the value of one dollar. The failure of TerraUSD, along with the Luna token, led to a broader downturn in the cryptocurrency market, impacting established digital assets such as Bitcoin (BTC).
Federal prosecutors in Manhattan charged him with multiple counts, including securities fraud, wire fraud, commodity fraud, and conspiracy. However, Do Kwon has consistently denied any wrongdoing, stressing that he acted transparently regarding the workings of his products.
In a significant development last June, Kwon agreed to pay an $80 million civil penalty to the US Securities and Exchange Commission (SEC) as part of a $4.55 billion fine. colony Related to his company Terraform Labs.
As part of the settlement, Do Kwon also agreed to impose a ban on future cryptocurrency transactions. However, Kwon’s legal challenges are not over yet, as he faces the possibility of criminal penalties in the US judicial system.
During a civil trial in April, a federal jury found Kwon and Terraform Labs liable for defrauding investors. Closing arguments by Terraform’s legal team claimed that Kwon was honest about his products, even when they failed. However, Do Kwon missed the trial due to his detention in Montenegro.
A litmus test for cryptocurrency regulation?
As Bitcoin I mentionedMontenegro’s Justice Minister Bojan Bozovic signed Kwon’s extradition order last week, rejecting South Korea’s request for his extradition. This decision came after a legal battle that included extradition requests from both the United States and South Korea for more than a year.
Do Kwon joins a growing list of cryptocurrency executives facing legal repercussions following the 2022 market downturn.
Notable figures include Sam Bankman Freed, founder of the collapsed FTX exchange, who is currently appealing a 25-year prison sentence for fraud. Fraud against customersand Alex Mashinsky, former CEO of Celsius Network, who recently pleaded guilty to fraud charges.
As Kwon prepares for his court appearance, the outcome could have major implications for the future of cryptocurrency Systems And investor protection.
The courtroom drama is expected to attract significant attention, not only because of Kwon’s high profile but also because of the broader impact his case could have on the fast-moving cryptocurrency landscape.
At the time of writing, Terra’s Luna Classic Token (LUNC) is trading at $0.0001148, up 1.2% on the 24-hour time frame.
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