Do Kwon, the infamous man behind the saga around Terra LUNA, may have been extradited to the United States but that doesn’t mean the story ends here. The South Korean-born co-founder of Terraform Labs has pleaded not guilty to nine felony charges related to fraud linked to the spectacular collapse of the Terra ecosystem.
Difficult to Determine Exact Number of Do Kwon Victims, Says Attorney
In a recent filing, government prosecutors stated that more than one million victims globally may have been affected by the events.
“The government estimates that the number of victims in this case exceeds hundreds of thousands of individuals and entities, and potentially totals more than one million.”
Daniel M. Gitner, an attorney for the United States Southern District of New York, informed victims of the case about their rights and that the government would set up a website to update the public, deeming other forms “impracticable.”
Gitner said it was tough trying to estimate an exact number of Kwon’s victims, given the vast number of transactions on the Terraform platform and the way trades happened, i.e. on foreign exchanges.
The $40 billion disaster is seen as one of the contributing factors for the 2022 market downturn. Kwon had been in Montenegro awaiting extradition to either South Korea or the United States in what turned out to be a lengthy legal battle.
As lawyers fought over which jurisdiction should take Kwon, Han Chang-Joon, Kwon’s former chief financial officer (CFO), who had fled to the European country with Kwon, was deported to South Korea early last year.
The pair had been in a Montenegrin prison after they used fake passports to get out of the country, potentially in an effort to avoid prosecution.
SEC Enforcement Director: Terraform Neither Decentralized nor Finance
The U.S. Securities and Exchange Commission (SEC) alleges that from April 2018 to May 2022, Kwon misled investors through unregistered sales of crypto assets.
He is accused of making false claims about the profitability and stability of these assets. The collapse of UST in May 2022 led to significant investor losses, with the SEC charging them with fraud and failure to provide necessary disclosures.
Gurbir S. Grewal, the director of the SEC’s Division of Enforcement, strongly criticized the actions, stating:
“The Terraform ecosystem was neither decentralized, nor finance. It was simply a fraud propped up by a so-called algorithmic “stablecoin” – the price of which was controlled by the defendants, not any code.”
Disclaimer
This article is provided for information only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
