Bitcoin (btc) 
Do Kwon Pleads Not Guilty to Charges Tied to TerraUSD Collapse
Do Kwon, the co-founder of Terraform Labs, entered a not guilty plea to criminal fraud charges in a Manhattan federal court on Thursday. The charges stem from his alleged role in the collapse of the TerraUSD and Luna cryptocurrencies, which led to an estimated $40 billion loss in market value in 2022.
Allegations of Misleading Investors
Federal prosecutors claim that Kwon misled investors about TerraUSD’s stability by stating that its value was maintained by a proprietary algorithm in 2021. However, prosecutors assert that Kwon secretly used a high-frequency trading firm to artificially sustain the stablecoin’s $1 peg.
Charges and Potential Sentencing
The indictment includes charges of securities fraud, commodities fraud, wire fraud, conspiracy, and money laundering. If convicted, Kwon could face significant penalties. Additionally, South Korean authorities are continuing their investigation, which could lead to a 40-year prison sentence if convicted.
Key Points in the Case
- Do Kwon was extradited from Montenegro to face charges in the United States.
- He was arrested in March 2024 while attempting to board a flight with forged passports.
- Montenegro’s Justice Minister approved Kwon’s extradition to the United States, ending months of legal disputes between the U.S. and South Korea.
Kwon’s next court appearance will outline further proceedings in the case. The outcome of this case remains a central topic in discussions about accountability within the cryptocurrency industry.
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