U.S. Attorney Damian Williams | U.S. Department of Justice
Do Hyeong Kwon, co-founder and former CEO of Terraform Labs, has been extradited from Montenegro to the United States to face charges related to fraud. This announcement was made by Daniel M. Gitner, Attorney for the United States, alongside Attorney General Merrick B. Garland and James E. Dennehy, Assistant Director in Charge of the FBI's New York Field Office.
Kwon appeared in a Manhattan federal courtroom following his arrival in the U.S. on December 31, 2024. The case is under the jurisdiction of U.S. District Court Judge John P. Cronan, with an initial conference scheduled for January 8, 2025.
Daniel M. Gitner stated: “A federal grand jury has indicted Do Kwon for misleading his investors in order to fraudulently inflate the value of Terraform’s cryptocurrencies, and laundering the proceeds of his crimes.” He noted that this alleged fraud led to over $40 billion in losses for investors worldwide.
Attorney General Garland emphasized: “Do Hyeong Kwon will now be held accountable in an American courtroom for...his elaborate schemes involving Terraform’s cryptocurrencies.” He highlighted efforts to secure Kwon's extradition despite attempts to evade capture using a fraudulent passport.
FBI Assistant Director James E. Dennehy commented: “Do Kwon...allegedly defrauded investors by falsely advertising the company's blockchain products as decentralized...resulting in more than $40 billion in investor losses.”
The Superseding Indictment alleges that from at least 2018 until 2022, Kwon orchestrated multiple schemes involving false claims about Terraform’s stablecoin protocol and other financial technologies.
Key misrepresentations involved TerraUSD (UST), Luna Foundation Guard Ltd., Mirror Protocol on Terraform's blockchain, Chai payment processing application transactions, and Genesis Stablecoins usage.
In March 2023, Kwon was arrested while attempting to use a fake passport to travel outside Europe. He faces charges including commodities fraud, securities fraud, wire fraud conspiracy charges with potential maximum sentences totaling up to 130 years if convicted.
Mr. Gitner acknowledged assistance from various international bodies including Interpol and Montenegrin authorities in facilitating Kwon's extradition and recognized support from U.S regulatory agencies such as the SEC and CFTC involved in separate actions against him.
