Do Kwon’s U.S. Hearing Pushed Back As 4TB of Data Surfaces

A judge at the Manhattan federal court, in the U.S. Attorney’s Office for the Southern District of New York, has granted a delay in a status conference planned for Do Kwon, the embattled co-founder of Terraform Labs.

The delay allows both the prosecution and defense teams to review the voluminous evidence.

This decision follows a request from prosecutors, who had uncovered 4 terabytes of new evidence, on top of the previously released 600 gigabytes provided by the U.S. government.

Slow Burn For Do Kwon

The massive data trove, revealed in a letter to Judge Paul Engelmayer of the New York District Court, necessitates additional time for both prosecution and defense to review the materials, pushing the scheduled March hearing to April.

The newly discovered evidence includes data extracted from electronic accounts and materials obtained from third-party entities and individuals. With so much data, anything is possible.

Prosecutors stated that the initial 600 gigabytes of data already included significant materials, such as Do Kwon’s statements to the Securities and Exchange Commission (SEC), extracted data from his cellphones, and comprehensive records from his personal and business email accounts.

Regarding evidence seized by foreign authorities, the government confirmed possessing four cellphones and other personal items seized from Do Kwon in Montenegro but stated they have not identified any other evidence seized by foreign authorities or witness interviews conducted by them.

The postponement will allow Do Kwon’s defense team additional time to examine 4 terabytes of new evidence. The final trial is still set for January 26, 2026.

The Rise and Fall of Terraform Labs

Kwon, along with Daniel Shin, founded Terraform Labs in 2018 and played an important role in making it one of the successful blockchain ecosystems. At its peak in April 2022, LUNA reached a value of $119, and the Terra ecosystem was valued at $60 billion.

However, their success did not last long. In May of the same year, the Terra ecosystem collapsed, with LUNA and UST losing almost all their value. The event wiped out approximately $40 billion in market capitalization and caused huge losses for crypto investors.

Following the collapse, Kwon faced numerous legal challenges. The former CEO of Terraform Labs was arrested in Montenegro in March 2023 for attempting to travel with a forged passport.

The arrest then initiated a complex extradition process. Both the U.S. and South Korean authorities wanted to prosecute him for financial crimes related to the collapse of Terraform Labs’ cryptocurrencies.

There was uncertainty about which country would take precedence in the extradition process. At one point, Montenegro’s Justice Minister suggested South Korea might have priority due to a “first-come, first-served” policy.

In December 2024, Montenegro’s Justice Minister Bojan Bozovic approved Kwon’s extradition to the U.S. The extradition occurred shortly thereafter.

Hail Rome!

Kwon faces multiple criminal charges filed by federal prosecutors in Manhattan, including securities fraud, wire fraud, commodities fraud, and conspiracy. Prosecutors allege that he deceived investors about the stability of TerraUSD and the use cases for the Terra blockchain.

During his first appearance in New York federal court on January 2, Kwon pleaded not guilty to these charges.

Apart from criminal charges, Kwon previously faced civil charges from the SEC. The securities regulator brought enforcement action against Kwon and Terraform Labs in February 2023.

In April 2024, a jury unanimously found Terraform Labs and Kwon liable for securities fraud and in June 2024, Terraform Labs and Kwon agreed to a settlement with the SEC.

As part of the settlement, they paid more than $4.5 billion in disgorgement, prejudgment interest, and civil penalties. Kwon is personally responsible for paying at least $204 million of this amount.

The settlement also includes a permanent ban on Kwon and Terraform Labs from buying and selling crypto asset securities.