TLDR
- Do Kwon’s US trial tentatively scheduled for January 2026 due to massive evidence review needs
- Over 6 terabytes of data and multiple encrypted phones need to be processed and translated
- Prosecutors estimate over 1 million victims in the Terra/Luna collapse case
- Kwon pleaded not guilty to nine criminal charges including fraud and money laundering
- Previously found guilty in SEC civil case, ordered to pay $4.5 billion in fines
Former Terraform Labs co-founder Do Kwon’s criminal trial has been tentatively scheduled for January 2026, as prosecutors face the daunting task of processing an enormous volume of evidence.
The announcement came during a hearing Wednesday at the Southern District of New York, where lead prosecutor Jared Lenow detailed the extensive preparation required for the case.
The timeline, described as “unprecedented” by District Judge Paul Engelmayer in his 15-year judicial career, stems from the need to analyze approximately six terabytes of data. This includes information from multiple encrypted phones provided by Montenegrin authorities following Kwon’s extradition to the United States last week.
Prosecutors must not only sift through the massive data cache but also translate numerous documents and messages from Korean to English. The technical challenge of unlocking four encrypted cell phones adds another layer of complexity to the evidence-gathering process.
The case centers around the May 2022 collapse of TerraUSD, an algorithmic stablecoin designed to maintain a constant value of one U.S. dollar. The failure of this system led to approximately $40 billion in losses across the cryptocurrency market, affecting what prosecutors estimate to be over one million investors.
Kwon faces nine criminal charges, including securities fraud, wire fraud, and money laundering conspiracies. During his recent court appearance, he entered a not guilty plea to all charges. The prosecution’s case focuses on allegations that Kwon deliberately misled investors about the stability of the Terra ecosystem.
The scope of the case has prompted prosecutors to request permission to establish a public online notification system. This system would allow them to keep the vast number of alleged victims informed about court proceedings as the case progresses.
Judge Engelmayer acknowledged the unprecedented nature of scheduling a trial more than a year after the initial conference. In a lighter moment during the hearing, he joked that the prosecution would need to “back up a U-Haul to the Southern District” to handle the volume of evidence.
The court has given Kwon’s defense team, led by Michael Ferrara of Hecker Fink LLP, one week to request an earlier trial date in 2025 if they choose to do so. The next hearing has been scheduled for March 6.
Judge: Trial starting January 26, 2026, then. I’ll give you one week to ask for earlier or the ship will sail. For a next conference date, how about eight weeks from now, with an update a week before. Let’s meet March 6, with a letter on Feb 27.
— Inner City Press (@innercitypress) January 8, 2025
Before his criminal trial begins, Kwon has already faced legal consequences in a separate civil case. A New York jury found both Kwon and Terraform Labs guilty in a fraud lawsuit filed by the U.S. Securities and Exchange Commission. The court ordered Terraform Labs to cease operations and pay $4.5 billion in fines.
During his legal proceedings, Kwon spent 22 months in custody in Montenegro. Reports indicate he personally financed $200 million while the United States worked on his extradition process.
The prosecution team faces several immediate challenges. They must coordinate with Montenegrin authorities to process evidence, work with translators to convert Korean documents to English, and employ technical experts to unlock the encrypted devices.
The volume of digital evidence in this case exceeds typical criminal proceedings, necessitating specialized technical support and additional time for thorough analysis. Prosecutors emphasize the importance of careful examination of all materials to build a comprehensive case.
The effect of the Terra/Luna collapse extended beyond direct investors, impacting the broader cryptocurrency market and leading to the downfall of several crypto-related businesses. The prosecution alleges that Kwon’s actions contributed to this wider market instability.
The case has drawn international attention, with authorities from multiple countries participating in the investigation. The evidence includes materials gathered from jurisdictions across Asia, Europe, and North America.
The most recent development in the case involves the prosecution’s efforts to establish victim notification protocols, highlighting the global reach and complexity of the alleged fraud scheme.
