Number of Do Kwon’s victims could exceed one million — court filing

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Worldwide, it is projected by prosecutors associated with the U.S. government that Terraform Labs’ co-founder Do Kwon might have impacted over a million individuals due to the fall of the ecosystem.

On January 6th, Daniel Gitner, acting as the U.S. Attorney, informed the court in the Southern District of New York about the process for notifying Kwon’s victims regarding their rights in his criminal proceedings.

As a concerned crypto investor, I’ve learned that the U.S. Attorney is planning to create a dedicated website detailing the public hearings regarding Kwon’s case. Apparently, other available methods for ensuring victim rights were deemed impractical.

In simpler terms, Gitner stated that it’s challenging to specifically count Kwon’s victims due to the numerous transactions involving Terraform’s cryptocurrencies on international exchanges, digital wallets, or trading accounts without personal details. However, the Government believes that over 500,000 individuals and entities may have been affected, with a possible total of even more than one million victims.

On the 2nd of January, Kwon stood before an American judge for the initial time, after his extradition from Montenegro. He denied the accusations of nine felonies linked to fraud at Terraform, choosing to remain in custody.

In 2022, the Terra ecosystem experienced a catastrophic failure, an event which may have played a role in triggering a major cryptocurrency market crash. This collapse had severe consequences and led multiple companies to declare bankruptcy.

In 2023, Kwon, who is reportedly linked to fraud at the platform, was detained in Montenegro for separate offenses. As the U.S. and South Korea sought his extradition following allegations of fraud, he stayed in the country instead.

In good company?

In the same legal district where other notable crypto leaders have been indicted, such as Sam Bankman-Fried (ex-FTX CEO) and Alex Mashinsky (ex-Celsius CEO), Kwon is anticipated to confront criminal accusations. Previously, Changpeng Zhao, former Binance CEO, admitted guilt for one felony charge and was sentenced in the Western District of Washington.

The Montenegrin government did not determine Kwon’s legal standing until December 2024, at which point he was handed over to U.S. authorities and taken into custody for criminal proceedings. It remains undecided if the Terraform co-founder will be offered a plea bargain or if the legal process will proceed with a full-fledged trial.

In April 2024, a U.S. judge determined that Kwon and Terraform were responsible for fraud in a case brought by the U.S. Securities and Exchange Commission. They consented to repay approximately $4.5 billion, which includes compensatory damages, fines, and pre-judgment interest.

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2025-01-06 23:59