Do Kwon made his first appearance in a US court today, facing federal fraud charges. Kwon entered a plea of “not guilty,” local reporters have claimed.
The US Justice Department is seeking prison time for his offenses, and his home country also wishes to see him behind bars.
Do Kwon Finally Faces Court
Do Kwon, founder of Terraform Labs, has been involved in this extradition battle for quite some time. A high court in Montenegro approved Kwon’s initial extradition in February 2024, but he subsequently went through several appeals.
However, the battle finally ended on December 27, and US authorities apprehended him on New Year’s Eve. Today, he appeared in court.
“Do Kwon is chatting with one of his lawyers, smiling- apparently in good spirits. In Montenegro on December 31 at 10 AM local, FBI took [him into] custody. Kwon plead not guilty through legal counsel, who added: ‘We consent to detention without prejudice,’” a local reporter in the courtroom claimed.
This prolonged legal battle centers around the TerraUSD collapse, when one of Terraform’s stablecoins dramatically cratered the market. Do Kwon entered an undisclosed settlement with the SEC in May, but that only involves one set of charges. The Commission wanted Kwon for misleading his investors, and this warrants penalties like fines and bans.
However, Do Kwon is wanted by the US Justice Department for fraud committed in the financial sector and for using fake passports to flee arrest unsuccessfully. These charges involve prison time.
Additionally, Kwon’s home country of South Korea also attempted to prosecute him, and he faces 40 years if ever convicted in that jurisdiction.
In light of the extreme seriousness of these events, his apparent sense of calm is fairly remarkable. However, today’s court appearance is only the start of a long arraignment and trial process. Do Kwon fought very hard to avoid US extradition, even funding the Montenegrin opposition party to improve his chances of remaining in the country.
In short, even if he pursues a plea deal similar to his agreement with the SEC, it currently seems quite probable that Do Kwon will face prison time. Despite increasing pro-crypto sentiment in the US government, prosecutors are still outspokenly eager to sentence major fraudsters like Sam Bankman-Fried. A high-profile case like Kwon’s will also attract attention.
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