Just In: Terraform Co-Founder Do Kwon’s Trial To Begin In 2026

The US has said that Do Kwon, the co-founder and former CEO of Terraform Labs, the company behind the Terra ecosystem, will have his criminal fraud trial commence in January 2026. This came out on Tuesday during the first court hearing in Manhattan where the two sides are starting to review through the six-terabyte database of evidence.

Here’s Why Terraform Co-Founder Do Kwon’s Trial Is Delayed Until 2026

According to the latest report from Manhattan’s Southern District Court, the criminal fraud trial of Terraform Co-Founder Do Kwon will start in January 2026. This is because the two parties require more time to go through the six terabytes of data in the discovery process.

Several factors that the Prosecutors pointed out as reasons for the delay include inability to access four cell phones produced by the Montenegrin authorities during Kwon’s extradition. Moreover, the translation of the extracted data from Korean language to English language took much time.

Authorities think that these encrypted phones are the main piece of evidence that can be connected to the charges against the Terraform Co-Founder. These devices are central to the prosecution’s case as they may hold records of financial transactions and communications directly linked to the allegations of crypto fraud.

Do Kwon’s Custody and Legal Proceedings to Date

Do Kwon has already been in police custody for 22 months in Montenegro before being extradited to the United States on 31st December 2024. As soon as Kwon was brought to the United States, Terra Co-Founder pleaded not guilty to a nine-count indictment. The charges are securities fraud, wire fraud, commodities fraud, and conspiracy to commit money laundering, that stem from the $40 billion Terra/LUNA ecosystem failure in 2022.

The loss of the Terraform Labs’ projects created world-wide probes, and Kwon and his firm were charged with civil fraud by the U.S. SEC in 2023. A New York jury found both guilty, resulting in penalties totaling $4.5 billion, of which Kwon himself was ordered to pay $200 million. Following this ruling, Terraform Labs filed for bankruptcy, further complicating the legal landscape surrounding the company.

Discovery Process Presents Challenges for Both Sides

During the initial hearing, lead prosecutor Jared Lenow emphasized the magnitude of the evidence. The government is working to unlock the four encrypted devices provided by Montenegrin authorities and assess their relevance. Similarly, the translation of communications from Korean into English adds another layer of complexity.

The presiding judge, Paul Engelmayer, noted the unusual length of time between the initial conference and the trial date. While unprecedented in his career, Engelmayer granted the delay to ensure both parties had adequate time to analyze the evidence. The defense team has until next week to decide if Kwon prefers an earlier trial date in 2025.

Terraform Co-Founder Faces Multiple Legal Challenges

The legal troubles for the Terraform Co-Founder are far from over. Apart from the crypto fraud charges, Kwon continues to be a focus of investigations connected with the fall of the Terra/LUNA. His position as the CEO during the period of the project collapse has put him under pressure from regulators.

The next trial will concern charges of securities fraud, wire fraud and other related charges. Therefore, the prosecution will depend on the evidence from Kwon’s devices. If found guilty, the trial will have a bearing on how other high profile crypto fraud cases will be addressed in the future.

The court has scheduled the next status conference for March 6, 2025, at 11 a.m. Eastern Time. During this session, the court will review updates on the discovery process and any potential changes to the trial timeline. Both the defense and prosecution will provide progress reports on their analyses of the crypto fraud evidence.

Moreover, a recent filing made after Kwon’s extradition shows that Terra collapse may have affected more than a million investors globally. US prosecutors have weighed in on the scope of the global impact and noted its spread.

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