U.S. Attorney Damian Williams | U.S. Department of Justice
Do Hyeong Kwon, a 33-year-old citizen of South Korea, has been extradited from Montenegro to the United States to face federal fraud charges. The unsealed superseding indictment accuses Kwon, co-founder and former CEO of Terraform Labs PTE Ltd., of schemes to deceive investors and inflate the value of Terraform's cryptocurrencies.
Kwon arrived in the U.S. on December 31, 2024, and appeared before U.S. Magistrate Judge Robert W. Lehrburger in Manhattan. His case is assigned to U.S. District Court Judge John P. Cronan, with an initial conference scheduled for January 8 at 10:30 a.m ET.
Attorney General Merrick B. Garland stated, "Do Hyeong Kwon will now be held accountable in an American courtroom for, as alleged in court documents, his elaborate schemes involving Terraform’s cryptocurrencies, which resulted in over $40 billion in investor losses." He added that despite attempts to evade justice by laundering proceeds and using a fraudulent passport, Kwon's extradition exemplifies the Justice Department's international cooperation.
Daniel M. Gitner, Attorney for the United States for the Southern District of New York, said, "A federal grand jury has indicted Do Kwon for misleading his investors...causing devastating losses to countless investors in the United States and around the world."
FBI Assistant Director James E. Dennehy noted that "for at least four years," Kwon allegedly manipulated market perceptions through false advertising and market manipulation leading to substantial investor losses.
The indictment details various misrepresentations by Kwon regarding Terraform's products like TerraUSD (UST), Luna Foundation Guard Ltd., Mirror Protocol, Chai application transactions, and Genesis Stablecoins.
In May 2022, the collapse of UST and LUNA resulted in significant financial losses exceeding $40 billion for investors globally after failed attempts by Kwon to maintain their market value.
Kwon was arrested on March 23, 2023, in Europe while attempting to travel using a fraudulent passport. Previously charged on that date in New York's Southern District under an initial indictment.
Facing multiple charges including commodities fraud, securities fraud, wire fraud among others—Kwon could receive up to 130 years imprisonment if convicted on all counts as determined by a federal district court judge based on sentencing guidelines.
The FBI led investigations with support from various international bodies including Interpol; several U.S.-based attorneys are prosecuting this high-profile case involving significant cross-border legal collaboration.
An indictment remains an allegation until proven otherwise beyond reasonable doubt within judicial proceedings ensuring presumption innocence rights protection for defendants involved such as Mr.Kown currently undergoing trial processes domestically following successful extradition procedures executed effectively across jurisdictions worldwide today
