The trial of Do Kwon, co-founder and former CEO of Terraform Labs, has been tentatively scheduled for January 2026, in what is shaping up to be one of the most complex and consequential legal cases in cryptocurrency history.
The judge handling Do Kwon's case, Paul Engelmayer, postponed the Terraform co-founder's trial until 2026 due to the complexity of the existing evidence.
Prosecutors are faced with a mountain of evidence that exceeds the 6 terabytes of data, From Four phones seized from Kwon by the government of Montenegro and were handed over to the United States government after Kwon's extradition.
However, these devices are encrypted and many of the documents they contain are in Korean, Kwon’s native language, which has increased the complexity of this judicial process. Experts anticipate that this case could set a key precedent for the regulation of the crypto industry.
Do Kwon faces up to 130 years in prison if convicted
Kwon, charged with nine felony counts including securities fraud, wire fraud, commodities fraud and money laundering conspiracy, faces a possible sentence of up to 130 years in prison. As he has informed According to this outlet, the charges are related to the collapse of the Terra-Luna ecosystem in 2022, which resulted in estimated losses of more than $40.000 billion and affected more than one million victims, according to the latest published reports.
Judge Engelmayer, who is presiding over the case in the U.S. District Court for the Southern District of New York, called the complexity of the case “unprecedented” in his career.
For all of the above reasons, he ruled in favor of postponing the trial until January 2026, to give the prosecution and defense more than a year to review and process the evidence, which, as mentioned, includes four encrypted cell phones provided by the Montenegrin authorities, as well as Documents and communications in Korean that require translation for further study and evaluation.
The Terraform Labs Case Testing Challenge
One of the biggest hurdles in this case is the amount and complexity of the evidence. Prosecutors have described the discovery process as “massive,” with more than 6 terabytes of data including encrypted and non-public information. In addition, the need to translate much of this evidence from Korean to English adds an additional layer of difficulty.
During the hearing on January 8, lead prosecutor Jared Lenow noted that the U.S. government faces significant delays due to technical challenges in unlocking the devices and processing the information. “It looks like we’re going to be backing a U-Haul for the Southern District,” Judge Engelmayer said during the session, underscoring the magnitude of the case.
A precedent for the crypto industry
Do Kwon's trial is not only significant for the charges against him, but also for its potential impact on cryptocurrency regulation. This case could set a legal framework for future prosecutions related to large-scale frauds in the sector, especially regarding the liability of blockchain project leaders.
The collapse of Terra-Luna in 2022 was a turning point for the industry, eroding investor confidence and accelerating regulatory scrutiny around the world. If Do Kwon is found guilty, this trial could strengthen oversight and transparency measures in the crypto ecosystem.
Whats Next?
The next milestone in this case will be a status conference scheduled for the March 6th 2025, where both parties are expected to provide updates on the progress of the discovery process.
Meanwhile, Do Kwon, who it was declared innocent of all charges against him, he remains detained without bail in a New York correctional facility, after spending 22 months in custody in Montenegro.
