The Southern District of New York's Attorney’s Office has agreed to more time for everyone involved to sort through extensive evidence about Do Kwon, the co-founder of Terraform Labs.
This delay provides both legal teams the chance to thoroughly examine the voluminous trove of evidence.
Following the discovery of 4 terabytes of data by prosecutors, a delay request was put through to the court, adding to the 600 gigabytes initially shared by the U.S. government.
Slow Burn For Do Kwon
This treasure trove of information, detailed in a submission to Judge Paul Engelmayer, requires more time for all parties to sift through, thereby rescheduling the March hearing to April.
The fresh batch of evidence includes data from online accounts and materials received from other entities, making it an extensive review task.
Prosecutors highlight that the initial 600 gigabytes already featured key items like Do Kwon's interactions with the SEC, phone data, and a complete set of his personal and business emails.
Around evidence seized internationally, the U.S. government has acknowledged the seizure of four mobile devices and other personal belongings from Do Kwon in Montenegro but hasn't identified further materials or interviews.
With 4 terabytes of new evidence to process, Do Kwon’s defense can now take a closer look, as the final court appearance is slated for January 26, 2026.
The Rise and Fall of Terraform Labs
Together with Daniel Shin, Kwon started Terraform Labs in 2018, propelling it to one of the notable names in the blockchain space. At its zenith in April 2022, LUNA hit $119, and Terra's valuation soared to $60 billion.
However, their triumph was fleeting. The following month, Terra's collapse saw LUNA and UST lose almost all their worth, wiping out $40 billion in market value and deeply impacting investors.
After the downfall, Do Kwon found himself amidst numerous legal woes, eventually getting arrested in Montenegro in March 2023 while trying to travel using a forged passport.
Kwon's arrest kicked off a tangled extradition process as both the U.S. and South Korea aimed to prosecute him for financial crimes linked to Terraform Labs’ collapse.
There was a puzzled atmosphere about who would get priority in the extradition process, with a point where Montenegro’s Justice Minister signaled South Korea might be first due to its policy.
It was in December 2024 that Montenegro’s Justice Minister Bojan Bozovic okayed Kwon’s extradition to the U.S., a process that quickly followed suit.
Hail Rome!
Now facing multiple federal charges in Manhattan, including securities and wire fraud, prosecutors argue that Kwon misled investors about TerraUSD’s stability and Terra’s broader blockchain usage.
During his initial hearing in New York's federal court on January 2, Kwon entered a plea of not guilty.
Aside from the criminal allegations, Kwon also dealt with civil charges levied by the SEC, who filed enforcement actions against him and Terraform Labs in February 2023.
By April 2024, a jury had come to a unanimous decision on the culpability of Terraform Labs and Kwon for securities fraud, leading to a settlement with the SEC in June 2024.
Under the settlement terms, they forked out over $4.5 billion covering disgorgement, interest, and penalties, with Kwon personally owing $204 million.
Part of the agreement also bans Kwon and Terraform Labs from trading in crypto asset securities indefinitely.
