A US federal court has postponed a key hearing in the case against Terraform Labs co-founder Do Kwon after prosecutors submitted an extensive amount of new evidence, significantly broadening the case.
According to court filings, the status conference, originally scheduled for March 10 in the Southern District of New York, has been pushed to April 10.
Hearing delayed
Prosecutors argued that the defense requires additional time to analyze the newly provided four terabytes of discovery. The court concurred, citing the “voluminous discovery” as justification for the delay.
Court documents indicate that on Feb. 27, the US government handed over 600 gigabytes of evidence to Kwon’s legal team, including data from his cellphones, emails, and crypto transactions.
Authorities now intend to provide an additional four terabytes of discovery by next week.
Despite the postponement, the jury trial remains scheduled for Jan. 26, 2026. Additionally, victims of the Terraform Labs collapse have until April 30 to submit claims for financial losses.
The delay in Kwon’s case introduces further complexity to an already high-profile legal battle. With an immense volume of discovery materials now under review, his defense team must navigate a challenging process ahead of trial.
Federal prosecutors allege that Kwon knowingly misrepresented the stability of Terraform’s ecosystem, leading to one of the most significant financial downturns in crypto history.
Meanwhile, Kwon continues to deny any wrongdoing and claims that the market downturn was unforeseen rather than the result of fraudulent activity.
SEC case
Kwon, who was extradited from Montenegro to the US on Dec. 31, 2024, entered a not guilty plea on Jan. 2 to multiple fraud-related charges. His case stems from the collapse of Terraform Labs’ algorithmic stablecoin, TerraUSD, which resulted in roughly $40 billion in investor losses in 2022.
Kwon’s extradition followed a prolonged legal battle between authorities in Montenegro, South Korea, and the US. Terraform Labs has also faced scrutiny from the Securities and Exchange Commission (SEC), which has accused Kwon of orchestrating a large-scale crypto fraud.
In April 2024, a jury found Do Kwon and Terraform Labs liable for defrauding investors in crypto asset securities. The SEC had argued that Kwon and his company misrepresented the stability of their ecosystem, leading to significant investor losses.
Following the jury’s verdict, the SEC filed a motion requesting $5.3 billion in disgorgement and civil penalties against Terraform Labs and Do Kwon. This amount was described as a “conservative” but “reasonable approximation” of the ill-gotten gains from the alleged fraud.
The court ultimately imposed a $4.5 billion fine on both Kwon and Terraform Labs.
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