- Do Kwon’s criminal fraud trial, stemming from the $40 billion collapse of the Terra/LUNA ecosystem, has been delayed until January 2026 due to challenges in accessing encrypted data and translating evidence.
- Kwon faces a nine-count indictment, including securities fraud and money laundering, while his company, Terraform Labs, filed for bankruptcy after the collapse.
A Long Wait for Justice
The highly anticipated criminal fraud trial of Do Kwon, co-founder of the ill-fated cryptocurrency platform Terra, is not set to begin until January 2026. This delay comes as both prosecutors and defense attorneys prepare for a daunting legal battle involving a massive six-terabyte collection of evidence. The case stems from the catastrophic $40 billion collapse of the Terra/LUNA ecosystem in 2022, which sent shockwaves through the crypto world.
Unlocking the Data
One of the key challenges facing the prosecution involves accessing encrypted data. According to lead prosecutor Jared Lenow, there are significant hurdles in unlocking four of Kwon’s cell phones, which were provided by Montenegrin authorities upon his extradition to the United States in late December 2024. These phones are expected to hold crucial evidence, but the encrypted nature of the information could cause delays in the trial process.
In addition to encryption challenges, the extracted data needs to be translated from Korean into English, further complicating the review process. Lenow emphasized that the sheer volume of the data, combined with the technical issues surrounding it, could result in more delays.
Kwon’s Legal Troubles
Do Kwon has already spent 22 months in a Montenegrin detention facility, awaiting extradition to the U.S. for his criminal charges. Despite the time already spent behind bars, the process remains far from over. In an initial hearing in Manhattan, U.S. District Judge Paul Engelmayer noted that setting a trial date so far in advance was unusual in his experience, but necessary due to the scope of the evidence and the challenges involved.
Kwon is facing a nine-count indictment, including charges of securities fraud, wire fraud, and money laundering conspiracy. In addition to the criminal case, the U.S. Securities and Exchange Commission (SEC) charged Kwon with civil fraud in 2023, leading to a $4.5 billion penalty. Terraform Labs, Kwon’s company, filed for bankruptcy following the collapse of its ecosystem.
The Road Ahead
The next status conference for Kwon’s case is scheduled for March 6, 2025, where further updates on the trial’s progress will be provided. For now, the lengthy delay reflects the massive scale of the case and the complexities involved in handling the evidence.
With a high-profile trial looming and billions of dollars at stake, the outcome of Kwon’s case could have far-reaching consequences for the crypto industry and its regulatory future.