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Terraform Labs Founder Do Kwon Pleads Not Guilty to US Fraud Charges
Terraform Labs co-founder and former CEO Do Kwon has pleaded not guilty to multiple fraud charges in a Manhattan federal court on Thursday. This appearance follows his extradition from Montenegro, where he had been detained since March 2023 for traveling on a fake passport.
Charges Linked to TerraUSD and Luna Collapse
The charges are linked to the $40 billion collapse of the TerraUSD and Luna cryptocurrencies, which disrupted global cryptocurrency markets in 2022. Federal prosecutors in Manhattan charged Terraform Labs co-founder Do Kwon with securities fraud, wire fraud, commodities fraud, conspiracy, and a new count of money laundering conspiracy.
Prosecutors’ Claims
Prosecutors claim that Kwon falsely stated that an algorithm, the "Terra Protocol," stabilized the coin in May 2021, while he secretly arranged for a trading firm to purchase large quantities of TerraUSD to artificially sustain its price.
Growth of Terraform Products
Much of this growth followed Kwon’s brazen deceptions about Terraform and its technology, according to the updated indictment. The prosecutor’s office alleges that these claims attracted both retail and institutional investors, pushing the value of Terraform products, including the Luna token, to $50 billion by early 2022.
Court Appearance
Terraform Labs co-founder Do Kwon, 33, appeared before U.S. Magistrate Judge Robert Lehrburger on Thursday. He denied all wrongdoing and maintained his stance that Terraform Labs had been truthful about its operations.
Conclusion
The case against Do Kwon is a significant development in the ongoing investigation into the collapse of TerraUSD and Luna. The charges against him are a result of a thorough investigation by federal prosecutors, and it will be interesting to see how the case unfolds.
FAQs
Q: What are the charges against Do Kwon?
A: Do Kwon is facing charges of securities fraud, wire fraud, commodities fraud, conspiracy, and money laundering conspiracy.
Q: What is the background of the case?
A: The case is linked to the $40 billion collapse of the TerraUSD and Luna cryptocurrencies, which disrupted global cryptocurrency markets in 2022.
Q: What is the current status of the case?
A: Do Kwon has pleaded not guilty to the charges, and the case is ongoing.
Q: What are the potential consequences for Do Kwon if convicted?
A: If convicted, Do Kwon faces significant jail time and fines. The specific consequences will depend on the outcome of the case.
