US prosecutors estimate that Do Kwon, co-founder of Terraform Labs, likely had 1 million victims worldwide after the collapse of the Terra ecosystem.
This claim was filed in New York City court on January 6, 2025, with Kwon facing nine felony counts related to the Terraform Labs fraud.
In the document Submitted Through the Acting US Attorney Daniel Gitnerthe government has made clear its intention to notify victims regarding their rights under the Justice for All Act 2004. Given the massive scale and global reach of Terraform Lab's solution, traditional methods of notifying victims are believed to be impractical. Instead, the government proposed creating a public website for Kwon's case proceedings.
The recording stated:
“Although it is difficult to accurately determine the number of Kwon’s victims in light of Terraform’s massive number of purchases and sales of cryptocurrencies and the manner of those transactions (with many transactions in those assets occurring on foreign exchanges and through a digital asset or cryptocurrency wallet) trading accounts Without personally identifiable information), the government estimates that the number of victims, in this case, exceeds hundreds of thousands of individuals and entities, potentially totaling more than one million people.
The Justice for All Act provides that a victim of a federal crime has certain rights such as timely notice of public court proceedings, the opportunity to be heard during sentencing or plea agreements, and the right to restitution if applicable. However, the law allows courts to take action in cases where a large number of victims need to be considered; Reasonable procedures are clear in this case.
Do Kwon has faced long legal troubles since the collapse of the Terra ecosystem 2022which wiped out billions of dollars of investor funds and was a major contributor to the broader downturn in the cryptocurrency market. Kwon was sent to the United States in December 2024 after lengthy negotiations involving several jurisdictions, including South Korea, following his arrest in 2019. Montenegro in 2023 for an unrelated fee.
On January 2, 2025, Kwon appeared in a US court for the first time and entered a case Plea of not guilty to the charges against him. He remains in detention. Kwon and Terraform Labs were also charged with fraud by the SEC in a civil case in April 2024. In that case, he and Terraform Labs were ordered to pay approximately $4.5 billion in compensatory damages, civil penalties, and pre-judgment interest.
Moving forward with this case, the government's victim notification website is expected to assume an important role in ensuring compliance with the victim's legal rights without burdening the court process. For victims, this represents a real step toward transparency and recognition of the harm they suffered as a result of the collapse of Terraform Labs.
Source link