Do Kwon’s 2025 U.S. Fraud Trial Faces Major Delays Due to Data Challenges

• Do Kwon’s 2025 trial faces delays, with challenges in unlocking encrypted data and translating Korean material.
• Prosecutors estimate over one million victims from Kwon’s fraud, linked to Terra/LUNA’s $40B collapse.
• Kwon misled investors about Terraform Labs’ decentralized nature, leading to massive financial losses in 2022.

Terraform Labs co-founder and former CEO Do Kwon faces a criminal fraud trial in the U.S., scheduled for January 2025. This gives both prosecutors and defense attorneys time to review a vast amount of data from Kwon’s case. Authorities anticipate delays due to encrypted files and the need to unlock four cell phones seized during Kwon’s extradition from Montenegro. Moreover, the government must translate the extracted material from Korean into English.

Trial Delays and Data Challenges

During a hearing in Manhattan, lead prosecutor Jared Lenow stated that accessing critical data from the phones would pose delays. The phones, provided by Montenegrin authorities, have encrypted data that is difficult to access. Additionally, extracting and translating the data could further complicate the timeline. District Judge Paul Engelmayer acknowledged that the trial’s scheduling for 2025 is highly unusual. Engelmayer, in fact, quipped about the sheer volume of data involved.

Kwon’s legal team, headed by attorney Michael Ferrara, has been given a week to request an earlier trial date. While the delays may benefit Kwon’s defense, the court emphasized that the trial’s complexity requires an amount of preparation. Kwon is facing severe charges and is presently being held in the United States. These include conspiracy including money laundering, wire fraud, and securities fraud that resulted from the Terra/LUNA ecosystem’s collapse in 2022.

Potential Impact on Victims and Prosecution’s Strategy

The case’s complexity also extends to the number of affected victims. Prosecutors estimate that the number of individuals harmed by Kwon’s actions exceeds hundreds of thousands, potentially reaching over one million. Given the impracticality of sending personalized notifications, the government proposed creating a public website to keep victims updated on the trial’s progress.

According to the prosecution, Kwon misled investors by portraying Terraform Labs as a decentralized ecosystem. When the TerraUSD and Luna cryptocurrencies crashed, $40 billion was lost because Kwon and his group were supposedly in control of the system. The foundation of the government’s case is the claim that Kwon deceived investors through manipulative means. Kwon and the cryptocurrency sector may be affected by the trial’s verdict.