Terraform Labs’ Do Kwon Faces New Money Laundering Charge

Terraform Labs co-founder Do Kwon has been hit with a new charge of money laundering, adding to the multiple felony charges he already faces following his extradition from Montenegro.

Kwon was indicted on eight felony charges in 2023, all related to the collapse of the Terra ecosystem in 2022. These charges stemmed from allegations of fraud, securities violations, and market manipulation.

A superseding indictment unsealed on January 2 in the U.S. District Court for the Southern District of New York has brought new allegations against Kwon. U.S. Attorney Damian Williams claims that Kwon conspired with others to engage in money laundering activities.

Attorney Williams accused Kwon of facilitating transactions exceeding $10,000 on the platform, allegedly tied to illegal activities. According to Williams, Kwon carried out these transactions “knowing that the property involved in certain financial transactions represented the proceeds of some form of unlawful activity.”

At a recent hearing in the Manhattan federal court, Kwon’s attorney, Andrew Chesley, entered a not-guilty plea on his behalf. The proceedings, overseen by U.S. Magistrate Judge Robert Lehrburger, concluded with Kwon being ordered to remain in detention.

Chesley stated that his client would not be pursuing a bail request at this time, leaving the Terraform Labs co-founder in custody as his legal battles continue. Kwon is expected back in court on January 8.

Kwon was arrested in Montenegro in 2023 after being caught using falsified travel documents. Following his detention, both the United States and South Korea submitted competing extradition requests, seeking custody of Kwon to face charges in their respective jurisdictions.

However, Montenegrin authorities delayed a decision on his legal status until December 2024, ultimately transferring Kwon to U.S. officials for prosecution.

Do Kwon Case Mirrors Bankman-Fried’s Legal Struggles

The legal case against Kwon shares striking parallels with the prosecution of Sam Bankman-Fried, the former CEO of FTX. Both high-profile figures in the cryptocurrency industry faced extradition to the United States after being detained in foreign countries.

Kwon was arrested in Montenegro for using fake documents, while Bankman-Fried was apprehended in the Bahamas following the collapse of his crypto exchange.

In both cases, U.S. prosecutors brought forward additional charges after their initial indictments. For Bankman-Fried, a campaign finance violation was added to a superseding indictment, which his defense later successfully argued should be dismissed because it was not included in the original extradition request.

Bankman-Fried was found guilty on seven felony charges and sentenced to 25 years in prison. However, he has since appealed the conviction. Recent reports even suggest growing speculation that Bankman-Fried may receive a presidential pardon. The rumors, fueled by prominent figures and changing political dynamics, have sparked widespread discussion.

Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

Post Views: 71