MANHATTAN– The meteoric rise and catastrophic fall of the TerraUSD and Luna cryptocurrencies have finally led to a reckoning for the man at the center of the storm. Federal prosecutors in the United States have brought serious charges against Do Kwon, the co-founder of Terraform Labs, following a dramatic collapse that wiped out an estimated $40 billion(₹3505 crores) in investor wealth. The downfall of the two digital currencies in 2022 sent shockwaves through the crypto world and sparked widespread calls for greater regulation.
Extradition and Indictment
Kwon’s legal troubles intensified after he was located and extradited from Montenegro. The move paved the way for him to face justice in the United States, where he was formally charged with nine counts, including securities fraud. US regulators had already laid the groundwork for this case in February 2024, accusing Kwon and his company of “orchestrating a multi-billion dollar crypto asset securities fraud.”
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A Possible Plea Change
The hearing has been scheduled in a Manhattan federal court where Kwon is expected to appear. Legal observers speculate that the hearing could be a pivotal moment in the case, as Kwon, who previously pleaded not guilty to all charges, may be poised to change his plea to guilty.
The Broader Ramifications
The legal action against Do Kwon is not just about one individual; it is seen as a bellwether for the future of the cryptocurrency industry. As the legal proceedings unfold, the outcome is expected to have a lasting impact on how digital assets are created, marketed, and regulated globally.
