Key Highlights:

• Do Kwon pleaded not guilty to fraud charges after being extradited to the U.S. on Tuesday.
• His venture, Terraform Labs, was responsible for launching the Luna cryptocurrency and the stablecoin TerraUSD, both of which collapsed in 2022, resulting in nearly $40 billion in losses.
• U.S. federal prosecutors claim that Kwon misled investors in 2021 about the mechanisms that were supposed to uphold the stablecoin’s $1 peg.

Kwon, the founder of the troubled Terra Luna crypto platform, pleaded not guilty to fraud charges following his extradition to the United States on December 31. Kwon is facing multiple charges, including securities and wire fraud, as well as commodities fraud and conspiracy to commit money laundering.

Prosecutors assert that Kwon deceived investors regarding the stability mechanism of TerraUSD, leading to significant financial losses. Kwon was taken into custody in Montenegro in March 2023 for passport forgery and has contested his extradition to the U.S. for over a year.

Next Steps:

Magistrate Judge Robert W. Lehrburger from the Southern District of New York has ordered Kwon to remain detained until his next court appearance on January 8.