Do Kwon, the co-founder of the bankrupt Terraform Labs, pleaded not responsible to fraud fees introduced in opposition to him by US prosecutors for his function within the $40 billion TerraUSD stablecoin collapse, in accordance with Bloomberg.
One other Excessive-Profile Crypto Trial
Kwon is going through 9 fees, together with wire, securities, and commodities fraud. Regardless of his not-guilty plea, he agreed to stay in custody with out bail.
His trial might develop into one other main crypto trial following the conviction of Sam Bankman-Fried, the previous CEO of FTX, who acquired a 25-year jail sentence. Notably, Kwon is being prosecuted by the Manhattan US legal professional’s workplace, the identical workforce that dealt with Bankman-Fried’s case.
Earlier than the trial started, Kwon’s extradition from Montenegro was eventful, as each the US and South Korea sought custody. A Montenegro court docket initially granted extradition to South Korea, however the choice was later overturned as a consequence of authorized technicalities. After a year-long dispute, Kwon was finally extradited to the US.
In 2023, Kwon and an affiliate have been arrested in Montenegro whereas making an attempt to journey to Dubai utilizing pretend journey paperwork.
The Collapse of Do Kwon’s Crypto Empire
Kwon was recognized for founding Terraform Labs. Nevertheless, the challenge’s two cryptocurrencies, TerraUSD and Luna, collapsed in 2022, erasing roughly $37 billion in worth. The autumn of the algorithmic stablecoin brought on the closure and downfall of a number of different cryptocurrency firms.
In June, Terraform Labs and Kwon agreed to a settlement with the US Securities and Trade Fee (SEC), committing to pay round $4.5 billion in restoration and civil penalties. Kwon personally agreed to pay at the very least $204.3 million.
Initially, the US regulator sought $5.3 billion in settlement. Nevertheless, the defendants’ authorized representatives countered with a proposal of $1 million in civil penalties and no restoration or injunction.
Moreover, Kwon and Terraform Labs have been completely banned from shopping for or promoting crypto asset securities, together with tokens within the Terra ecosystem.
Earlier this 12 months, Terraform Labs declared chapter in Delaware, United States. Within the court docket submitting, the now-defunct firm reported liabilities ranging between $100 million and $500 million, with estimated property in the identical vary.
This text was written by Arnab Shome at www.financemagnates.com.
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