New York, January 6, 2025 – Terraform Labs’ Do Kwon extradited to the US for $40B crypto fraud. Allegations include market manipulation and laundering; he faces up to 130 years in prison.
Terraform Labs co-founder Do Hyeong Kwon, accused of orchestrating a $40 billion cryptocurrency fraud, has been extradited to the United States, marking a significant moment in the fight against global financial crimes.
Kwon appeared in federal court in Manhattan after being detained in Montenegro in March 2023 while attempting to evade extradition using a fraudulent passport. U.S. Attorney General Merrick Garland said:
This extradition is a victory for justice and accountability. Do Kwon’s fraudulent schemes shattered the lives of countless investors, and he will now face the consequences in an American courtroom.
The charges stem from Kwon’s alleged manipulation of Terraform’s cryptocurrencies, TerraUSD (UST) and LUNA, whose combined market value once soared to over $50 billion. However, the algorithmic stablecoin TerraUSD failed in May 2022, triggering a catastrophic market collapse and wiping out more than $40 billion in investor funds.
Federal prosecutors allege Kwon misled investors about Terraform’s blockchain technology, manipulated market data, and laundered funds through complex schemes. His misrepresentations included claims about the Terra blockchain’s integration with the Chai payment app and the manipulation of Terraform’s Mirror Protocol.
James E. Dennehy, Assistant Director of the FBI’s New York office said:
For four years, Kwon played puppet master, deceiving investors worldwide. This case underscores our commitment to pursue fraudsters wherever they try to hide.
Facing multiple counts of fraud and money laundering, Kwon could receive up to 130 years in prison if convicted. The case is set to become a landmark moment in cryptocurrency fraud enforcement.
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