2 weeks ago
Terraform Labs co-founder Do Kwon appeared successful tribunal connected Jan. 2 successful the US and pleaded not blameworthy to fraud charges linked to the $40 cardinal implosion of the TerraUSD (UST) stablecoin, Bloomberg News reported.
Kwon appeared earlier US Magistrate Judge Robert Lehrburger successful Manhattan and agreed to stay successful custody without bail. He faces 9 charges, including wire, securities, and commodities fraud, stemming from his alleged relation successful Terraform Labs’ illness aft the terms of its tokens, LUNA and UST, crashed.
After being arrested successful Montenegro successful March 2023 portion attempting to question connected a fake passport, Kwon remained successful the state during a tug-of-war betwixt US and South Korean authorities implicit wherever helium would look charges. Both nations had accused Kwon of fraud, with South Korea seeking extradition owed to his citizenship.
Meanwhile, Kwon appealed to debar extradition to the US, arsenic fiscal transgression penalties successful South Korea are mostly little severe.
Montenegro’s Constitutional Court rejected the appeal connected Dec. 26 and the country’s Justice Minister subsequently signed an order to extradite the Terraform Labs co-founder a fewer days later.
On Dec. 31, the Montenegrin constabulary transferred Kwon to US authorities astatine the Podgorica International Airport.
Awaiting trial
Prosecutors successful New York allege Kwon misled investors astir the Terra blockchain’s capabilities and adoption rates, claiming his actions straight contributed to the platform’s catastrophic collapse.
The Manhattan US Attorney’s Office, which successfully prosecuted FTX co-founder Sam Bankman-Fried past year, is starring the lawsuit against Kwon.
Moreover, Kwon is already facing ineligible consequences. A US assemblage recovered him and Terraform Labs liable successful a civilian fraud lawsuit brought by the Securities and Exchange Commission (SEC), resulting in a $4.47 cardinal settlement. Terraform subsequently filed for bankruptcy.
Kwon’s lawyer declined to remark aft the hearing. A follow-up tribunal league is scheduled for January 8, mounting the signifier for what could beryllium a high-profile crypto proceedings successful the Southern District of New York.
The station Do Kwon pleads not blameworthy successful US tribunal implicit Terra ecosystem collapse appeared archetypal connected CryptoSlate.
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