Do Kwon's Victims Could Amount Over a Million

US prosecutors handling Do Kwon's criminal case have estimated that the Terraform Labs co-founder's actions may have impacted over one million victims, contributing to a staggering $40 billion loss in the collapse of Terra-LUNA.

On 6 January, Acting US Attorney Daniel Gitner filed a notification in the US District Court for the Southern District of New York, detailing steps to inform victims of their rights.

Due to the scale of the impact, the government plans to create a dedicated website for public proceedings, as alternative methods are deemed impractical.

Gitner highlighted the challenges of identifying victims, given the nature of transactions conducted on foreign exchanges or via anonymous crypto wallets.

Despite these hurdles, authorities estimate that hundreds of thousands of individuals and entities may be affected.

He noted:

“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.”

Key Pretrial Set for 8 January

Kwon appeared before a US judge for the first time on 2 January, following his extradition from Montenegro.

He pleaded not guilty to nine felony fraud charges related to his role in the collapse of Terraform Labs and agreed to remain in detention.

The collapse of the Terra ecosystem in 2022 is widely seen as a key factor in the broader crypto market downturn, leading to numerous bankruptcies within the industry.

Kwon, who was arrested in Montenegro on unrelated charges in 2023, had been the subject of extradition requests from both the US and South Korea.

A critical pretrial conference set for 8 January 2025, marks the start of what prosecutors describe as a historic cryptocurrency fraud case.

They allege Kwon intentionally misled investors about the stability of TerraUSD (UST), the algorithmic stablecoin central to Terra's ecosystem.

The collapse devastated the project's loyal supporters, known as "Lunatics," many of whom had invested heavily based on Kwon's public claims of the protocol's stability.

It remains unclear whether authorities will pursue a plea deal or move forward with a full criminal trial.