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Kwon entered the plea in Manhattan federal court two days after
his extradition from Montenegro.
The indictment alleges that the man dubbed by some as “the
cryptocurrency king” lied to investors from 2018 to 2022 to fool
them into pouring money into Terraform Labs, the Singapore
crypto firm he cofounded.
Authorities say investors worldwide were harmed by the $40
billion crash of Terraform Labs’ cryptocurrency.
The May 2022 collapse came despite the company’s claim that
TerraUSD was a “stablecoin” that could be relied upon.
Kwon did not speak during his court appearance, except to
acknowledge that he understood English. His lawyer, Andrew
Chesley, entered not guilty pleas to two separate versions of
the indictment charging him with conspiracy, along with
commodities, securities and wire fraud. A money laundering
charge was added Thursday.
Chesley and another defense lawyer, David Patton, declined
comment as they emerged from the courtroom. Their client was
returned to a federal jail after the lawyers consented to his
detention.
The superseding indictment accused Kwon of deceiving investors
by telling them that Terraform had developed novel reliable
financial technologies enabling it to turn blockchain technology
into a self-contained decentralized financial world with its own
money, payment system, stock market and savings bank.
“In fact,” the indictment said, “Kwon's constructed financial
world was built on lies and manipulative and deceptive
techniques used to mislead investors, users, business partners,
and government regulators” about Terraform's business.
“Behind the scenes, core Terraform products did not work as Kwon
advertised, and were manipulated to create the illusion of a
functioning and decentralized financial system in order to lure
investors,” it added.
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