The co-creator of the cryptocurrency platform Terraform Labs PTE Ltd. (Terraform) has been extradited to face $40B fraud charges.
Do Hyeong Kwon, 33, a citizen of the Republic of Korea, was subject to an extradition order from Montenegro and appeared in a Manhattan court to face federal fraud charges.
Before the close of 2025, Kwon appeared before U.S. Magistrate Judge Robert W. Lehrburger for the Southern District of New York. Kwon’s case is assigned to U.S. District Court Judge John P. Cronan.
“Do Hyeong Kwon will now be held accountable in an American courtroom for, as alleged in court documents, his elaborate schemes involving Terraform’s cryptocurrencies, which resulted in over $40 billion in investor losses,” said Attorney General Merrick B. Garland.
Terraform founder extradited to face $40B fraud charges
As Due reported, there had been a two-year court battle and a nine-day jury verdict to bring the guilty charge to the door of Kwon and the crypto giant. The Securities and Exchange Commission (SEC) found them guilty of securities fraud on a mass scale.
The SEC’s Division of Enforcement Director Gurbir S. Grewal said that Kwon “caused devastating losses for investors and wiped out tens of billions of market value nearly overnight. For all of crypto’s promises, the lack of registration and compliance have very real consequences for real people.”
The guilty verdict also found that Terraform sold crypto assets from 2018 to 2022 in unregistered transactions and would perpetrate a fraudulent scheme that would lead to a loss of $40 billion in market value to retailers and investors.
Later in 2024, Kwon and Terraform agreed to pay $4.5 billion to settle the court case’s fallout partially.
Attorney for the United States, Daniel M. Gitner for the Southern District of New York, said, “As we allege, this fraud and the crash of Terraform’s cryptocurrencies in May 2022 erased over $40 billion in investor assets, causing devastating losses to countless investors in the United States and around the world. Kwon will now face justice in a federal courtroom in Manhattan.”
Kwon has been charged with two counts of commodities fraud, two counts of securities fraud, two counts of wire fraud, two counts of conspiracy to commit commodities fraud, securities fraud, and wire fraud, and one count of money laundering conspiracy.
He faces a total of 130 years if convicted and found guilty of all of these charges by a federal court judge.
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