Do Kown, the failed co-founder of Terraform Labs and the mastermind behind the now-infamous TerraUSD and Luna cryptocurrencies, has pleaded not guilty to a series of U.S. fraud charges in Manhattan federal court.
The charges stem from the $40 billion collapse of digital assets in 2022, which triggered an intense devastation in the cryptocurrency industry.
Do Kwon faces accusations of securities fraud, wire fraud, commodities fraud, money laundering conspiracy, and market manipulation. Prosecutors allege that Kwon misled investors by claiming TerraUSD, a stablecoin designed to maintain a $1 value, could automatically stabilize itself through an algorithmic protocol.
However, investigators contend that its stability relied on concealed interventions, including multimillion-dollar purchases by high-frequency trading firms.
In court, Do Kwon’s legal team argued the collapse was a result of unpredictable market forces rather than deliberate deceit. They maintained that Kwon had been transparent about the risks associated with TerraUSD and Luna, which were marketed as experimental financial tools.
The Manhattan U.S. Attorney’s office has not yet scheduled Kwon’s next court appearance. Meanwhile, the fallout from the TerraUSD collapse continues to influence global cryptocurrency regulations, which calls for stricter oversight and greater transparency in digital asset markets.
Do Kwon’s Complicated Legal Landscape
Kwon’s plea marks a pivotal chapter in a broader legal saga. In 2024. He and Terraform Labs were found guilty of civil fraud in a case initiated by the U.S. Securities and Exchange Commission (SEC), which accused them of misleading investors about the stability of TerraUSD. The SEC settlement imposed an $80 million fine and barred Kwon from crypto-related activities in the U.S.
Apart from this, a new 79-page indictment filed on Thursday introduced a money laundering conspiracy charge, which amplifies the stakes for the 33-year-old entrepreneur. If convicted on all counts, Kwon faces a potential sentence exceeding 100 years in prison.
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Source: https://www.cryptonewsz.com/do-kwon-no-guilty-us-fraud-charges-1st-trial/