Crypto Scammer Do Kwon Fights US Fraud Charges

Do Kwon, a young South Korean entrepreneur, recently faced court in the United States. He's the guy behind Terraform Labs, the company that created two cryptocurrencies, TerraUSD and Luna, which lost a staggering $40 billion in 2022. Kwon was extradited from Montenegro to the U. S. this week and pleaded not guilty to fraud charges. Federal prosecutors in New York have accused him of multiple counts of fraud and conspiracy, including a new money laundering charge. The case revolves around Kwon's alleged deceit in 2021, where he misled investors about TerraUSD, a 'stablecoin' meant to stay at $1. He claimed a computer algorithm called "Terra Protocol" fixed the coin's value when it dipped, but instead, he secretly got a trading firm to buy tons of the token to keep its price up. This deception, say prosecutors, drove investors to buy more of Terraform's products and boost Luna's value to $50 billion by spring 2022.

However, things fell apart when TerraUSD's value started dropping again in May 2022. The trading firm found it tough to keep the coin's value up this time around. TerraUSD and Luna crashed, affecting other cryptocurrencies like bitcoin and causing chaos in the crypto market. The trading firm prosecutors mentioned, though not named, matches descriptions of Jump Trading. They had reportedly supported TerraUSD in 2021. Jump hasn't commented yet. Last April, a Manhattan federal jury found Kwon and Terraform guilty of defrauding crypto investors. Kwon's lawyer argued that they'd been truthful about their products during a trial Kwon couldn't attend due to his detainment in Montenegro since March 2023. Terraform filed for bankruptcy in January 2023. Kwon joins a growing list of crypto moguls facing charges after the 2022 crypto market slump. Sam Bankman-Fried, founder of FTX, is appealing his 25-year sentence for stealing $8 billion. Alex Mashinsky, ex-CEO of Celsius Network, pleaded guilty to fraud charges last month.

Actions