US prosecutors announced that the fraud case allegedly behind Do Kwon, one of the founders of the Terra (LUNA) ecosystem, could affect more than 1 million people worldwide. Kwon was extradited to the United States last month and faces charges related to the tens of billions of dollars of Terra collapse.
Terra (LUNA) Case
Do Kwon was caught with a fake passport while trying to go to the United Arab Emirates in 2023. Kwon, who was arrested by Montenegrin authorities, was extradited by the Supreme Court upon the extradition request of the USA and South Korea, with a decision in favor of the USA.
U.S. prosecutors say Kwon’s financial scheme was maintained through lies and manipulative techniques. In the statement, “As a result of Kwon’s fraud, investors suffered losses of more than 40 billion dollars. “This damage covers millions of people, including individuals and institutions.” Even investors who think they’re just buying the bottom during the dip and lose more can be in the hundreds of thousands. It seems difficult for Do Kwon to get away with this with a small punishment.
Victims of Terra
While it is difficult to fully quantify the scope of Kwon’s fraudulent activities, the U.S. government estimates that at least hundreds of thousands of people, and potentially more than a million, were victims. Victims have purchased Terraform’s cryptocurrencies directly or through third parties.
Do Kwon’s scam had a huge impact on investors and users, resulting in a large victim base globally.
The collapse of Kwon’s Terra ecosystem caused a major shakeup in the cryptocurrency markets. While details about the fraud were being examined, the role of technology in financial regulations and audit deficiencies also came to the fore. In this process, both US and international legal authorities plan to take various steps to increase security in cryptocurrency markets. Kwon’s trial could be a major turning point in the regulation of digital assets.
6 Terabytes of data will be examined during the trial of Terraform Labs co-founder and former CEO Do Kwon on fraud charges. The process is expected to continue until January 2026.
Finally, the decisions that emerge during Kwon’s trial may offer important lessons to prevent similar situations in the future.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
