The criminal fraud trial of Do Kwon, co-founder and former CEO of Terraform Labs, is likely to commence only by January 2026. This delay is intended to give both prosecution and Kwon’s defense sufficient time to scrutinize an estimated six-terabyte assortment of evidence discovered during the investigation.
The prosecution, headed by Jared Lenow, mentioned in a recent Manhattan hearing that there could be potential delays due to difficulties in breaking the encryption of devices, alongside unlocking four cell phones supplied by Montenegro authorities during Kwon’s extradition to the U.S. on December 31. The prosecution listed the necessity to translate the discovered evidence from Korean, Kwon’s native language, as another potential delay.
District Judge Paul Engelmayer of the Southern District of New York humorously remarked during the hearing that the magnitude of evidence resembled a large removal van backing into the district. Engelmayer noted that scheduling a trial a year from the initial hearing was exceptional in his tenure as a judge. He asked Kwon’s primary attorney, Michael Ferrara of Hecker Fink LLP, to find out from his client—currently under detention without bail—whether he would prefer an earlier date for the trial. The defense was given one week to request an earlier date within 2025.
Kwon, last week, pleaded not guilty to a nine-count indictment that included charges ranging from securities fraud and wire fraud to commodities fraud and money laundering conspiracy, all these charges pertain to the $40 billion collapse of the Terra/LUNA ecosystem in 2022.
In 2023, the U.S. Securities and Exchange Commission charged Kwon’s company and him with civil fraud, leading to their guilty verdict by a New York jury. They were ordered to pay a total penalty of $4.5 billion, of which Kwon contributed $200 million. Post this, Terraform Labs filed for bankruptcy. The next status briefing of this case is slated to take place on March 6.