Do Kwon’s fraud trial is set for January 2026, delayed by extensive evidence and missing critical encrypted phones.
The criminal fraud trial of Do Kwon, co-founder and former CEO of Terraform Labs, the company behind the Terra ecosystem, is set to begin in January 2026, as announced by the U.S. administration.
Here’s Why Terraform Co-Founder Do Kwon’s Trial Is Delayed Until 2026
The U.S. administration revealed this information during an initial court hearing in Manhattan on Tuesday. At the hearing, both parties began reviewing a six-terabyte database of evidence.
The Southern District Court in Manhattan stated that the trial’s delayed start stems from the extensive time required to analyze the six terabytes of data involved in the discovery process.
Additionally, the inability of prosecutors to obtain four cell phones from Montenerin authorities during Do Kwon’s extradition and the lengthy process of translating extracted data from Korean into English contributed to the delay.
The encrypted phones, deemed critical evidence by authorities, may contain records of financial transactions and communications tied to the allegations against Do Kwon. These devices are crucial to the prosecution’s case, which focuses on cryptocurrency fraud.
Do Kwon’s Custody and Legal Proceedings to Date
Do Kwon, detained by Montenegrin police for 22 months before his scheduled extradition to the U.S. on December 31, 2024, pleaded not guilty to nine charges upon his arrival.
These charges, which include securities fraud, wire fraud, commodities fraud, and conspiracy to commit money laundering, stem from the 2022 collapse of the Terra/LUNA ecosystem, resulting in $40 billion in losses.
In 2023, the U.S. Securities and Exchange Commission charged Do Kwon and Terraform Labs with civil fraud related to the loss of Terraform projects. A New York jury found them guilty, imposing $4.5 billion in fines, of which Kwon was responsible for $200 million.
Following this verdict, Terraform Labs filed for bankruptcy, adding complexity to the company’s legal challenges. During the preliminary hearing, chief prosecutor Jared Lenow emphasized the importance of the evidence, particularly the encrypted devices.
Efforts to decrypt these devices and translate relevant Korean messages into English are ongoing, adding further delays. Presiding judge Paul Engelmayer acknowledged the unusually long timeline between the initial hearing and the trial date.
He approved the delay, noting it was necessary for thorough preparation. However, the defense has until next week to request an earlier trial date in 2025 if Kwon prefers.
Terraform Co-Founder Faces Multiple Legal Challenges
Do Kwon continues to face unresolved legal issues linked to the Terra/LUNA collapse and cryptocurrency fraud allegations. As CEO during the project’s failure, he remains under scrutiny from authorities.
The upcoming trial will address allegations of wire fraud, securities fraud, and related offenses, with evidence from Kwon’s devices playing a pivotal role. The trial’s outcome could set a precedent for handling high-profile cryptocurrency fraud cases in the future.
The next status conference is scheduled for March 6, 2025, at 11:00 AM ET, during which the court will review discovery progress and any adjustments to the trial timeline. Both prosecution and defense will provide updates on their examination of the evidence.
A subsequent filing after Do Kwon’s extradition highlighted the global impact of Terra’s collapse, reportedly affecting over one million investors worldwide. U.S. prosecutors emphasized the far-reaching consequences of the incident.
