Do Kwon May Have Over 1 Million Victims Worldwide, Prosecutors Estimate

Prosecutors overseeing Do Kwon’s criminal case have estimated that the Terraform Labs’ co-founder could have more than one million victims across the world following the collapse of the ecosystem.

In a Jan. 6 filing in the US District Court for the Southern District of New York, Acting US Attorney Daniel Gitner notified the court of the procedures to inform Kwon’s victims of their rights in his criminal case.

According to the US Attorney, the government would set up a website about public proceedings in Kwon’s case as other methods for affording victims their rights were “impracticable.”

“While it is difficult to precisely quantify the number of Kwon’s victims in light of the sheer number of purchases and sales of Terraform’s cryptocurrencies and the manner of those transactions (with many transactions in those assets occurring on foreign exchanges and through digital asset wallet or crypto trading accounts without personal identifying information), the Government estimates that the number of victims in this case exceeds hundreds of thousands of individuals and entities, and potentially totals more than one million,” said Gitner.

Kwon appeared before a US judge for the first time on Jan. 2 following his extradition from Montenegro. He pleaded not guilty to nine felony charges related to fraud at Terraform and agreed to be held in detention.

Related: Do Kwon’s superseding indictment includes money laundering charge

The Terra ecosystem collapsed in 2022 and was likely one of the events that contributed to a significant crypto market downturn, eventually leading several firms to file for bankruptcy.

Kwon, one of the individuals accused of fraud at the platform, was arrested in Montenegro on separate charges in 2023 and remained in the country as the US and South Korea attempted to extradite him.

In good company?

Kwon will face criminal charges in the same jurisdiction as other high-profile crypto executives, including former FTX CEO Sam Bankman-Fried and former Celsius CEO Alex Mashinsky. Former Binance CEO Changpeng Zhao, who pleaded guilty to one felony charge, was sentenced in the Western District of Washington.

Montenegrin authorities did not decide on Kwon’s legal status until December 2024, when he was turned over to US custody and sent to face criminal charges. It’s unclear whether authorities will consider a plea deal with the Terraform co-founder or intend to move forward with a criminal trial.

In April 2024, a US judge found Kwon and Terraform liable for fraud as part of a civil case filed by the US Securities and Exchange Commission. Both agreed to pay around $4.5 billion in disgorgement, civil penalties and prejudgment interest.

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