By Luc Cohen
NEW YORK (Reuters) – Do Kwon, the South Korean cryptocurrency entrepreneur behind two digital currencies that may lose about $40 billion in 2022, was on account of seem in a U.S. courtroom on Thursday to face prices legal fraud prices after being extradited from Montenegro this week.
In March 2023, federal prosecutors in Manhattan charged Kwon, who co-founded Terraform Labs and developed the TerraUSD and Luna currencies, with two counts every of securities fraud, wire fraud, commodity fraud and conspiracy.
Kwon has denied any wrongdoing. He agreed final June to pay an $80 million civil penalty and be banned from crypto buying and selling as a part of a $4.55 billion settlement he and Terraform reached with the Securities and Alternate Fee of america.
He’s scheduled to look at 12:30 p.m. EST (5:30 p.m. GMT) earlier than U.S. Justice of the Peace Choose Robert Lehrburger in Manhattan federal courtroom.
Final April, a federal jury in Manhattan discovered Kwon and Terraform liable in a civil trial for defrauding cryptocurrency buyers.
A lawyer for Terraform stated in closing arguments that Terraform and Kwon informed the reality about their merchandise and the way they labored, even once they failed.
Kwon didn’t attend this trial as a result of he had been detained in Montenegro since March 2023. Terraform declared chapter final January.
The SEC and the U.S. Legal professional’s Workplace in Manhattan allege that Kwon misled buyers in 2021 in regards to the stability of TerraUSD, a so-called stablecoin designed to keep up a price of $1.
Kwon additionally developed Luna, a extra conventional token whose worth fluctuated however was carefully associated to TerraUSD.
The collapse of TerraUSD and Luna in 2022 drove down the worth of different cryptocurrencies, together with Bitcoin, and wreaked better havoc on the crypto market.
Kwon, 33, is considered one of a number of cryptocurrency tycoons to face federal prices after a 2022 drop in digital token costs brought on the collapse of a lot of corporations within the area.
Sam Bankman-Fried, founding father of the FTX trade, is interesting his conviction and 25-year jail sentence final March for stealing $8 billion from purchasers.
Alex Mashinsky, founder and former CEO of cryptocurrency lender Celsius Community, pleaded responsible final month to 2 counts of fraud.
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