Do Kwon’s US Trial: A Pivotal Moment for Crypto Accountability

Do Kwon, the founder of Terraform Labs, is facing a maximum sentence of 130 years in prison if his legal team fails to secure a favorable outcome in the upcoming US trial. Kwon recently appeared before Judge Paul Engelmayer of the US Southern District of New York, marking the beginning of the discovery phase.

Do Kwon’s Extradition and Charges in the US

Kwon’s extradition to the US was a long and complex process. After evading authorities for over two years following the collapse of the Terra platform in mid-2022, he was finally arrested in Montenegro in 2023. The decision to extradite him to the US was made after much debate about whether he should face justice in his home country, South Korea, where he also faced criminal charges. Ultimately, the federal case in the US took priority, potentially presenting a pivotal moment for legal accountability in the crypto industry.

The Collapse of Terra, UST, and LUNA

Kwon is accused of fraud following the collapse of TerraUSD (UST), an algorithmic stablecoin, and LUNA, the primary coin behind the Terra network. The collapse of UST and LUNA in 2022 triggered a contagion, putting pressure on top coins, including Bitcoin and Ethereum. The depegging of UST forced Kwon’s team to offload BTC in an attempt to re-peg UST, but ultimately failed.

The implosion of UST and LUNA resulted in investors losing over $40 billion cumulatively. It also initiated a chain reaction that negatively impacted other crypto entities, including Genesis and 3AC. The collapse affected hundreds of thousands of individuals and businesses, with estimates suggesting that the number of victims exceeds one million worldwide.

Charges and Plea Negotiations

US prosecutors claim that Kwon’s Terra ecosystem was built on lies and investor manipulation, leading to several charges, including nine felony counts. Kwon has pleaded not guilty to all charges. While the trial date is set for January 26, Judge Engelmayer has encouraged the prosecution and the defendant to consider plea negotiations. If a deal is reached, it may include an admission of guilt, significant penalties, and victim compensation, potentially resulting in a reduced prison sentence for Kwon.

Conclusion

The trial of Do Kwon marks a significant moment for the crypto industry, as it seeks to hold individuals accountable for their actions. With a maximum sentence of 130 years in prison, Kwon’s fate hangs in the balance. As the trial approaches, it remains to be seen whether Kwon will negotiate a plea deal or face the full force of the law.

Source: 99bitcoins.com

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