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Terraform Labs Co-Founder Do Kwon to Stand Trial in US on January 26, 2026
A federal judge has set a trial date for Terraform Labs co-founder Do Kwon, who is accused of orchestrating a crypto fraud scheme that caused over $40 billion in losses during the LUNA and TerraUSD collapse in May 2022. The trial is scheduled to begin on January 26, 2026.
Kwon, who has been held in custody at a New Jersey facility since his extradition from South Korea earlier this year, will face allegations of misrepresenting the stability of TerraUSD (UST), an algorithmic stablecoin, and other aspects of Terraform’s operations. Prosecutors claim that Kwon’s actions were part of a broader scheme to deceive investors and manipulate the market.
The defense team, led by attorney Michael Ferrara, has already begun contesting these allegations, arguing that Terraform’s products were legitimate and functional until market sentiment shifted. The team also plans to challenge the admissibility of evidence obtained through international cooperation and search warrants.
The case will have significant implications for the cryptocurrency industry, as prosecutors argue that LUNA, Terraform’s native token, qualifies as a security under US law. This contention could potentially lead to broader changes in how cryptocurrencies are regulated and classified.
Kwon’s legal team has expressed concerns about the scope of evidence and the challenges posed by the case’s complexity. The presiding judge, Paul Engelmayer, acknowledged these difficulties during a recent status conference, noting that he will need to navigate the legal complexities surrounding Terraform Labs’ operations.
The trial is expected to last four to six weeks and will be closely watched by the crypto community and regulatory bodies alike. As Kwon’s legal team works to build their defense, they are also addressing investigations and potential prosecutions in South Korea, adding an extra layer of complexity to his case.
In related news, Ethereum Faces Resistance: Market Cap Projections Point to $1.16T as Key Level
Source: cryptonewsland.com
