US Department of Justice: "Kwon Do-hyung Faces Up to 130 Years if Convicted"

"Caused Investor Losses Exceeding $40 Billion"

The US Department of Justice has charged Kwon Do-hyung, the head of Terraform Labs and a key figure in the Terra and Luna cryptocurrency crash, with fraud-related charges, stating that losses amounted to $40 billion (approximately 58.67 trillion KRW).

According to a statement posted on the US Department of Justice website on the 2nd (local time), the department explained that "Mr. Kwon is associated with large-scale fraud, money laundering of criminal proceeds, and concealment of crimes following the crash of Terraform's cryptocurrency."

The indictment stated that he participated in various crimes to deceive investors and inflate the value of Terraform's cryptocurrency.

Furthermore, the statement refuted claims made by Kwon to attract investors, arguing against the efficiency of stablecoins, the governance of the Luna Foundation Guard, and the success and operation of the investment platform known as Mirror Protocol.

Attorney General Merrick B. Garland stated, "Kwon Do-hyung will now be held accountable in a US court for his sophisticated scheme related to Terraform's cryptocurrency, which caused investor losses exceeding $40 billion."

Garland praised the US's success in securing Kwon's extradition, stating, "Despite Mr. Kwon's attempts to launder his scheme's proceeds and travel to a country without an extradition treaty with the US using a forged passport, we have secured this extradition."

Meanwhile, according to Reuters, Mr. Kwon appeared in the Southern Federal District Court of Manhattan, New York, on the 31st, claiming his innocence to Judge Robert Lehrburger. The next trial is scheduled for the 8th.

Mr. Kwon was arrested in Europe on March 23, 2023, on charges of attempting to travel to a country without an extradition treaty with the US using a forged passport. He was indicted earlier that day in the Southern District Court of New York.

The statement revealed that Mr. Kwon could face up to 130 years in prison, with each of the two counts of commodities fraud carrying a maximum sentence of 10 years, each of the two counts of securities fraud carrying a maximum sentence of 20 years, and each of the two counts of wire fraud carrying a maximum sentence of 20 years.

Kim Young-ri, Hankyung.com reporter smartkim@hankyung.com