US Court Postpones Key Hearing in Terraform Labs Case
A US federal court has delayed a crucial hearing in the legal proceedings against Terraform Labs co-founder Do Kwon, as prosecutors have introduced a significant amount of new evidence, expanding the scope of the case.
Delay in Hearing
- The status conference, initially set for March 10, has been rescheduled to April 10 in the Southern District of New York.
- Prosecutors claim that the defense needs more time to review the newly provided four terabytes of discovery.
- The court agreed, citing the extensive amount of evidence as the reason for the postponement.
Recently, the US government handed over 600 gigabytes of evidence to Kwon’s legal team, including data from his cellphones, emails, and crypto transactions. Additional four terabytes of discovery are expected to be provided by next week.
Despite the delay in the hearing, the jury trial for Kwon is still scheduled for Jan. 26, 2026. Victims affected by the Terraform Labs collapse have until April 30 to file claims for financial losses.
Complex Legal Battle
The delay in Kwon’s case adds complexity to the ongoing high-profile legal dispute. With a significant volume of discovery materials to review, Kwon’s defense team faces a challenging road ahead of the trial.
Federal prosecutors allege that Kwon misrepresented the stability of Terraform’s ecosystem, resulting in a substantial financial downturn in the crypto industry.
On the other hand, Kwon maintains his innocence and argues that the market decline was unexpected rather than a result of fraudulent activities.
SEC Involvement
Kwon, who was extradited to the US from Montenegro in late 2024, pleaded not guilty to multiple fraud-related charges linked to the collapse of Terraform Labs’ stablecoin, TerraUSD, causing around $40 billion in losses for investors in 2022.
Aside from legal battles, Terraform Labs has also been under scrutiny from the Securities and Exchange Commission (SEC), which has accused Kwon of orchestrating a large-scale crypto fraud.
In a previous case in April 2024, a jury found Kwon and Terraform Labs guilty of defrauding investors in crypto asset securities. The SEC requested $5.3 billion in disgorgement and civil penalties, with the court eventually imposing a $4.5 billion fine on both Kwon and Terraform Labs.
