Fallen South Korean crypto magnate Do Kwon pleaded not guilty in Manhattan federal court on Thursday. This is his first appearance in US court since being extradited from Montenegro. Kwon is facing allegations of conspiracy, fraud, and money laundering.
Prosecutors claim Kwon deceived investors from 2018 to 2022, persuading them to invest in Terraform Labs, his Singapore-based crypto startup. The indictment charges Kwon with falsely presenting TerraUSD as a reliable "stablecoin." Terraform Labs' bankruptcy in May 2022 resulted in a $40B loss, which had a severe impact on investors worldwide. Authorities argue that Kwon's "constructed financial world" was based on dishonesty.
Kwon stayed silent throughout the hearing, only affirming that he understood English. His lawyers, Andrew Chesley and David Patton pleaded not guilty on his behalf. They declined to speak after the proceedings.
The superseding indictment alleges that Kwon modified core Terraform products. It claims he constructed the illusion of a working independent financial system to entice investors. Kwon will stay in federal jail while the case progresses.
