In February 2023, the U.S. Securities and Exchange Commission (SEC) charged Kwon and Terraform Labs.
SEC Chair Gary Gensler said, “We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for Luna and TerraUSD. We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.”
South Korean authorities issued similar charges.
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Montenegro’s Role
Montenegro, which lacks extradition treaties with both the U.S. and South Korea, played a pivotal role in Kwon’s legal journey. After more than a year of court deliberations, Montenegro’s Justice Minister Bojan Bozovic authorized Kwon’s extradition last week.
The Fate of Terraform Labs
Terraform Labs filed for Chapter 11 bankruptcy protection in the U.S. in January 2024. Kwon’s case highlights the broader fallout within the crypto industry, joining figures like FTX’s Sam Bankman-Fried and Celsius Network’s Alex Mashinsky in facing accountability for industry misconduct.
