Terraform Labs co-founder Do Kwon faced a turbulent day in court on Jan. 2, 2025, as a US judge unsealed a superseding indictment against him, adding a conspiracy to commit money laundering charge to his legal woes. Kwon, who was extradited from Montenegro in late December 2024, pleaded not guilty during his first legal appearance in the United States.

The superseding indictment, presented by US Attorney Damian Williams in the Southern District of New York, accused Kwon of facilitating financial transactions exceeding $10,000, knowing the funds were derived from unlawful activities.

This charge follows the original eight-count indictment filed in March 2023 and later sealed in May 2024. The additional charge was revealed amid Kwon's court appearance, signaling escalating legal challenges for the former crypto mogul.

During the same court session, Kwon pleaded not guilty to all charges, including the newly unveiled money laundering allegation, as he appeared before Magistrate Judge Robert Lehrburger in Manhattan. He also agreed to remain in custody without bail.

The High Cost of Terraform's Downfall

Do Kwon has faced significant legal challenges following the 2022 collapse of "TerraUSD" and "Luna", which wiped out $40 billion in market value.

In June 2024, Terraform Labs reached a $4.47 billion settlement with the U.S. Securities and Exchange Commission (SEC) over fraud allegations. The settlement includes $3.6 billion in disgorgement fines, a $420 million civil penalty, and $467 million in prejudgment interest.

Furthermore, Kwon himself is personally liable for over $200 million, including $110 million in disgorgement, $80 million in civil penalties, and $14.3 million in interest.

In addition, Kwon is permanently barred from serving as an officer or director of any public company and from participating in crypto asset securities transactions.

Despite the financial settlements, Kwon continues to face criminal charges in the United States, including securities fraud, wire fraud, commodities fraud, and conspiracy. If convicted, he could face up to 130 years in prison.