Do Kwon faces new charges in addition to eight felonies: money laundering conspiracy

Author: Turner Wright, CoinTelegraph; Translator: Deng Tong, Golden Finance

The U.S. Attorney’s Office has filed an additional charge against Terraform Labs co-founder Do Kwon after he was extradited from Montenegro to the United States: money laundering conspiracy.

On January 2, the U.S. District Court for the Southern District of New York unsealed a superseding indictment in which U.S. Attorney Damian Williams accused Kwon of conspiring with others to launder money.

According to U.S. prosecutors, the Terraform co-founder facilitated more than $10,000 in transactions on the platform, “knowing that the property involved in certain financial transactions represented proceeds of some form of illegal activity.” The superseding indictment for Do Kwon was unsealed on January 2. Source: Courtlistener The money laundering charges are part of the superseding indictment and were not initially filed as part of the eight-count indictment against Kwon in March 2023. Prosecutors filed the indictment under seal in May 2024, and the judge ordered it unsealed when Kwon appeared in court on January 2.

Kwon, who was allegedly involved in the collapse of the Terra ecosystem in 2022, was arrested and jailed in Montenegro in 2023 for using forged travel documents. U.S. and South Korean authorities filed competing petitions to extradite the Terraform co-founder, but Montenegrin authorities did not decide on his legal status until December 2024, when Kwon was handed over to U.S. officials.

Trial or Plea Deal?

The Terraform co-founder appeared in court on Jan. 2, pleaded not guilty to all charges, and agreed to be detained. It is unclear whether U.S. authorities will consider a plea deal or intend to proceed with a criminal trial.

Kwon’s case parallels that of former FTX CEO Sam “SBF” Bankman-Fried — another crypto executive who was subject to the jurisdiction of another country (the Bahamas) before being extradited to the U.S. In SBF’s case, his attorneys were able to argue that the campaign finance charge added to the superseding indictment should be dropped because it was not part of the extradition request.

Bankman-Fried was later convicted of seven felonies and sentenced to 25 years in prison, but he has appealed.

Another major industry figure — former Binance CEO Changpeng Zhao — pleaded guilty to one count and is serving a four-month sentence in 2024.