Do Kwon’s Trial Set for 2026 Amid Evidence Challenges

Do Kwon, co-founder of Terraform Labs, will face trial in January 2026 for criminal fraud charges stemming from the $40 billion collapse of TerraUSD (UST). The delay, announced during a Manhattan court hearing, is attributed to the massive six terabytes of evidence that prosecutors must review.

This case follows Kwon’s not guilty plea in response to charges related to the Terra/LUNA ecosystem’s collapse, which affected over 1 million investors globally.

Challenges in Evidence Review

A significant challenge for U.S. prosecutors is analyzing encrypted cell phones provided by Montenegrin authorities after Kwon’s extradition. These devices may hold critical data on financial transactions and communications linked to the 2022 Terra/LUNA collapse.

The process is further complicated by the need to translate evidence from Korean to English, adding to the already extensive timeline.

Next Steps: Status Conferences and Trial Timeline

According to Bloomberg and crypto analyst Jon Morgan, the next status conference is scheduled for March 6, 2025. During this session, updates on evidence review and potential timeline adjustments will be discussed.

Judge Paul Engelmayer emphasized the importance of a thorough analysis of the evidence, acknowledging the unusually lengthy lead-up to the trial. The outcome of this case could set a precedent for handling high-profile crypto fraud cases, with much depending on the encrypted evidence.

Escalating Legal Troubles for Kwon and Terraform Labs

Since his extradition from Montenegro in late 2024, Kwon has faced nine charges, including securities fraud, wire fraud, and money laundering conspiracy.

• In 2023, the U.S. Securities and Exchange Commission (SEC) charged Kwon and Terraform Labs with civil fraud.
• A jury found Terraform Labs guilty, imposing $4.5 billion in penalties, including $200 million owed by Kwon.
• Terraform Labs subsequently filed for bankruptcy, compounding Kwon’s legal challenges.

Terra Classic (LUNC) Market Impact

The fallout from the Terra/LUNA collapse continues to affect the cryptocurrency market. At the time of writing, Terra Classic (LUNC) is trading at $0.0001035, reflecting:

• 0.76% decline in the past 24 hours.
• 8.81% decrease over the past week, according to Coin Market Data.

With Do Kwon’s trial delayed to 2026, the case highlights the complexities of prosecuting high-profile crypto fraud. The extensive evidence review and encrypted data analysis could significantly influence the trial’s outcome, potentially shaping the future of cryptocurrency regulation and legal accountability.