U.S. Government Claims Over 1 Million Victims in Do Kwon’s Criminal Case

In a significant development in the criminal case against Do Kwon, the U.S. government has asserted that more than one million individuals were victims of the fraudulent activities at Terraform Labs. This claim was made during proceedings in a New York City court on January 6, 2025, where Kwon is facing nine felony counts related to fraud. The magnitude of the case is undeniable, with global ramifications stemming from the collapse of the Terra ecosystem in 2022.

In a document submitted to the court by acting U.S. attorney Daniel Gitner, the government outlined its approach to notifying victims of their rights under the Justice for All Act of 2004. Given the immense scale of the case, with victims from all around the world, the traditional methods of notification were deemed impractical. Instead, the government proposed establishing a public website dedicated to the case, allowing victims to stay informed on proceedings and their legal rights.

The Justice for All Act provides victims of federal crimes with a set of specific rights. These include the right to be informed about court proceedings, the opportunity to participate in sentencing hearings or plea agreements, and the potential for restitution where applicable. The Act also allows for flexibility in cases involving a large number of victims, like this one, where reasonable procedures can be implemented to ensure compliance without overwhelming the court system.

Terraform Labs' Collapse, Transparency, and the Path to Justice

The collapse of Terraform Labs and its Terra ecosystem in 2022 had devastating effects on investors, wiping out billions of dollars in value and triggering a broader downturn in the cryptocurrency market. This crisis has placed Do Kwon at the center of a high-profile legal battle, which has extended across multiple jurisdictions. Kwon, who has faced ongoing legal troubles since the collapse, was eventually extradited to the U.S. in December 2024 after his arrest in Montenegro in 2023 on unrelated charges.

On January 2, 2025, Kwon made his first appearance in a U.S. court, where he entered a not-guilty plea to the charges of fraud and other related offenses. He remains in custody while awaiting further legal proceedings. Alongside the criminal charges, Kwon and Terraform Labs are also facing a civil case brought by the U.S. Securities and Exchange Commission (SEC) in April 2024. In this case, the court ordered Kwon and Terraform Labs to pay nearly $4.5 billion in disgorgement, civil penalties, and prejudgment interest.

Looking ahead, the creation of the government’s victim notification website will play a crucial role in facilitating transparency in the case while ensuring that the rights of the victims are upheld. By centralizing information on the legal proceedings, the website aims to provide victims with easy access to court updates and allow them to better navigate the legal process.

For victims of Terraform Labs' collapse, this initiative offers a concrete step toward recognition and compensation for the harm they endured. The website will help prevent delays in the legal process and ensure that victims' voices are heard without overburdening the court system. As the case progresses, this effort highlights the importance of transparency and accountability in the pursuit of justice for those affected by the collapse.

As the criminal case against Do Kwon continues, the U.S. government’s efforts to ensure victims’ rights through the implementation of a dedicated notification website reflect a significant move towards justice. The collapse of Terraform Labs has left lasting scars on the cryptocurrency market and its investors, and this case marks an important step in addressing the wrongs committed by those at the helm of the platform. With the government’s strategic use of modern technology and legal frameworks, the hope is to provide victims with a more transparent and accessible path to justice.