Terraform Labs co-founder Do Kwon denies fraud allegations in US court
As Kwon awaits his January trial, the case raises important questions about industry transparency and accountability.

Do Kwon, the South Korean cryptocurrency entrepreneur responsible for the collapse of TerraUSD and Luna currencies, pleaded not guilty to US criminal fraud charges on Thursday. The plea followed his extradition from Montenegro earlier this week.
Kwon, co-founder of Terraform Labs, is accused of orchestrating a multi-billion-dollar fraud scheme that led to an estimated $40 billion loss in cryptocurrency value in 2022. Federal prosecutors in Manhattan unsealed a nine-count indictment against Kwon, charging him with securities fraud, wire fraud, commodities fraud, and conspiracy to commit money laundering.
The indictment claims Kwon deceived investors by falsely promoting TerraUSD as a stablecoin guaranteed to maintain its $1 value. Prosecutors allege that when TerraUSD’s value dropped in 2021, Kwon secretly enlisted a high-frequency trading firm to inflate the token’s price, misleading investors and artificially boosting its sister token, Luna.
These alleged misrepresentations drove substantial investment into Terraform Labs’ products, propelling Luna’s market value to $50 billion by early 2022. However, the scheme unravelled in May 2022 when TerraUSD and Luna crashed, causing turmoil in the broader cryptocurrency market.
Kwon, 33, remains in custody in Manhattan after declining to seek bail during his initial court appearance. His trial is set to begin on 8 January. Kwon has faced mounting legal troubles, including a $4.55 billion settlement with the US Securities and Exchange Commission and a federal jury finding him liable for defrauding investors earlier this year.
His case is part of a broader crackdown on cryptocurrency figures, including FTX’s Sam Bankman-Fried and Celsius Network’s Alex Mashinsky, as US authorities tighten scrutiny over the volatile industry.