With all the amazing opportunities and possibilities the crypto world has brought to our lives, it’s unfortunate that there are still some terrible use cases for crypto. One unfortunate use case for crypto is fraud, which has slowly continued year after year. The bulk of crypto fraud comes from individuals and fraud groups. Still, there have also been instances of crypto companies being accused of defrauding their customers, and today’s story is a similar tale. 

After a long game of extradition, Chase Do Kwon, co-founder of Terraform Labs, appeared in a US court on January 2, 2025, to plead not guilty to all charges held against him. This is Kwon’s first court appearance since his extradition to the United States. 

Kwon appeared before the US Magistrate Judge Robert Lehrburger of New York’s Southern District in Manhattan to submit his “Not Guilty” plea. He also agreed to be held without bail. 

This appearance in court comes after Long Do Kwon’s extradition battle. The tech executive had already been cleared for extradition since February 2024, when a high court in Montenegro approved his initial extradition. However, a long barrage of appeals from Kwon delayed the extradition until December 27, right before he was apprehended on New Year’s Eve.

Kwon now faces nine counts of various charges, including securities fraud, wire fraud, money laundering, and commodities fraud, all for his involvement in the collapse of the Terra ecosystem, in which one of Terraform’s stablecoins dramatically crashed in the market. 

During the case proceedings, Do Kwon had already reached an undisclosed settlement with the SEC back in May; however, that was only for one set of charges. 

The Securities and Exchange Commission now wants Kwon for misleading his investors, and if he is found guilty, it could mean penalties, including fines and bans. In addition, the US Department of Justice wants Kwon for fraud committed in the finance sector and for using fake passports to escape arrest. If he is found guilty of these, it could mean prison time.

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Sources: Court Listener

In addition to his US troubles, Kwon also faces the possibility of prosecution in his home country of South Korea, where if he is found guilty, he could face up to 40 years in prison. 

Kwon is currently in the hands of the United States. The Montenegrin Minister of Justice Bojan Božović approved Kwon’s extradition to the US on December 27. 

According to a translated document, the Montenegrin Minister of Justice made the following statement:

The gravity of the criminal acts, the place of execution, the order of submission of the request, the citizenship of the requested person, the possibility of further extradition to another country, as well as other circumstances.

While Kwon’s innocence remains to be seen, this case is already drawing much attention from the crypto world and eyes will be on the details of the case as it progresses. 

Terraform Labs Co-founder Do Kwon Freed from Jail in Montenegro | HODL FM
Follow the legal saga of Terraform Labs co-founder, Do Kwon, as local courts decide his extradition fate. Updates on release, passport seizure, and extradition battle.
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