US Case Against Do Kwon Postponed as Prosecutors Review Extensive New Evidence

A federal judge in Manhattan has postponed the U.S. government’s case against former Terraform Labs CEO Do Kwon, citing the need for prosecutors to evaluate a significant amount of new evidence.

Originally scheduled for March 6, the hearing has now been rescheduled for April 10, according to a ruling from Judge Paul Engelmayer dated March 3.

This decision followed a letter from prosecutors dated February 27, indicating their expectation to provide an additional 4 terabytes of discovery to the defense.

Newly Acquired Evidence Includes Data from Warrants and Third-Party Documents

The newly obtained materials reportedly include evidence acquired through warrants on various digital accounts, as well as documents from third-party entities and individuals.

Prosecutors stated that they had already provided Kwon’s team with approximately 600 gigabytes of information, which includes data from four of his mobile phones and emails from both his personal and corporate accounts.

Additionally, information related to Kwon’s extradition, the FBI’s collection of evidence in Montenegro, statements made to the U.S. Securities and Exchange Commission, and records of digital asset trading activities have been shared with the defense.

The collapse of the Terra ecosystem in May 2022 resulted in an estimated loss of $60 billion in market capitalization.

Its algorithmic stablecoin, TerraClassicUSD (USTC), lost its dollar peg, dropping below one cent.

The abrupt destabilization, coupled with intense selling pressure, also led to Terra Luna Classic (LUNC) losing most of its value.

Kwon, a South Korean national, spent several months traveling between Singapore and Dubai before arriving in Montenegro, where he was apprehended by authorities in March 2023.

He had allegedly attempted to leave for Dubai using fraudulent travel documents. After a four-month incarceration, negotiations between Montenegrin authorities and the U.S. resulted in Kwon’s extradition last December.

For those inquiring, I can confirm Do Kwon’s status conference has been postponed from March to April to accommodate additional evidence discovery.
The government is adding four cellphones belonging to Kwon to the evidence collection.
Trial is still scheduled to commence in January 2026. pic.twitter.com/OALr78EnlY

— Zack Guzmán (@zGuz) March 4, 2025

He made his initial appearance in a U.S. court on January 2, entering a not guilty plea to nine felony charges, all related to alleged fraud.

Despite the delay of his next hearing, Kwon’s trial remains set for January 26, 2026.

Pretrial motions are due by July 1, with responses to those motions required by August 11, as stipulated by the court.

Judge Approves $4.5B Terraform, Do Kwon Settlement with SEC

In June of last year, U.S. District Court Judge Jed Rakoff of the Southern District of New York (SDNY) approved a settlement that will require Terraform Labs and Kwon to pay a substantial $4.5 billion in disgorgement and civil penalties.

Additionally, they will be permanently barred from engaging in any transactions involving “crypto asset securities,” which includes tokens within the Terra ecosystem.

The settlement followed initial proposals from the SEC suggesting a $5.3 billion penalty, which Terraform Labs contested by advocating for a maximum fine of $1 million.

Ultimately, on June 6, the legal representatives for both Kwon and Terraform Labs agreed to the SEC’s revised settlement offer of $4.5 billion.

Terraform Labs, currently operating under Chapter 11 bankruptcy protection, faces the challenge of how to meet the significant financial obligations imposed by the settlement.

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