US Prosecutors Estimate Over 1 Million Victims in Do Kwon Crypto Fraud Case

U.S. prosecutors pursuing legal prices in opposition to Terraform Labs co-founder Do Kwon have estimated that the collapse of the TerraUSD and Luna cryptocurrencies could have affected multiple million people and entities.

The estimate was revealed in a submitting submitted on January 6 by performing U.S. Lawyer Daniel Gitner to the U.S. District Courtroom for the Southern District of New York.

Over 1 Million Folks Affected

Gitner admitted that precisely figuring out the variety of people affected by Kwon’s actions is difficult as a result of great amount of purchases and gross sales of Terraform’s cryptocurrencies and the character of these transactions. Nevertheless, he additionally mentioned:

“The Authorities estimates that the variety of victims on this case exceeds tons of of hundreds of people and entities, and probably totals multiple million.”

The document outlined the measures proposed beneath the Justice for All Act of 2004 to tell victims of their rights. Given the impracticality of sending individualized notices to each affected particular person, the federal government has steered making a public web site to maintain victims up to date on case proceedings.

Prosecutors allege that Kwon misled traders by selling his group as a decentralized monetary ecosystem that includes revolutionary applied sciences like its personal foreign money, cost system, inventory market, and financial savings financial institution.

In accordance with the indictment, he falsely claimed that the Terra ecosystem operated autonomously by way of blockchain expertise and consumer governance, hiding his and his group’s management.

The submitting states that Kwon’s system was constructed on “lies” and “manipulative and misleading” methods, finally resulting in investor losses exceeding $40 billion when the TerraUSD and Luna cryptocurrencies collapsed in Might 2022.

Authorized Troubles

Following the crash, Kwon grew to become a fugitive, evading authorities till his seize in Montenegro in 2023 on unrelated prices. Each South Korea and the U.S. sought his extradition, resulting in extended authorized battles. The co-founder was finally sent to the latter in December 2024

The 33-year-old now faces a number of legal prices in the USA, together with commodities fraud, securities fraud, wire fraud, and conspiracy to commit cash laundering. As well as, the Securities and Alternate Fee (SEC) introduced a civil fraud case in opposition to him and Terraform Labs in April 2024, leading to a $4.5 billion settlement.

On January 2, 2025, he appeared in a U.S. courtroom for the primary time and pleaded not responsible to the legal prices. He stays in custody, together with his subsequent courtroom listening to scheduled for January 8.