The legal battle surrounding Do Kwon, the embattled founder of Terraform Labs, has taken another twist. A Manhattan federal court has postponed Kwon’s hearing, originally scheduled for March 6, to April 10 following a prosecutor request for more time to review an additional four terabytes of newly surfaced evidence.
This development could significantly impact Kwon’s ongoing fraud case, as US prosecutors dig deeper into the collapse of the Terra ecosystem, which wiped out $60 billion in market value in May 2022.
The March 3 order by Judge Paul Engelmayer came after US prosecutors informed the court that they would be providing Kwon’s defense team with four terabytes of new discovery materials.
According to a Feb. 27 letter submitted by prosecutors, the new evidence consists of:
- Warrants on various electronic accounts tied to Kwon and Terraform Labs.
- Records from third-party entities and individuals involved in the Terra case.
- 600GB of data from four of Kwon’s previous cellphones.
- Emails from Kwon’s personal and business accounts.
- Evidence collected by the FBI in Montenegro.
- Statements made by Kwon to the US Securities and Exchange Commission (SEC).
- Crypto trading data records related to Terra’s collapse.
This massive influx of new evidence raises questions about whether the prosecution has uncovered previously unknown details that could further implicate Kwon in fraud and financial misconduct.
The Road to Extradition
Following the collapse of the Terra ecosystem, Kwon went into hiding, moving between Singapore, Dubai, and Montenegro. Authorities finally caught up with him in March 2023, when he was arrested in Montenegro while attempting to flee to Dubai with a fake Costa Rican passport. He was sentenced to four months in prison before finally being extradited to the US in December 2023.
After arriving in the US, Kwon appeared before a federal judge on January 2, 2024, where he pleaded not guilty to nine felony charges, including fraud and conspiracy. His full trial is set to begin on January 26, 2026.
What’s Next for Kwon’s Case?
While the new evidence has delayed his April hearing, Kwon’s legal team now faces an extensive review process. With prosecutors expanding their case, the next few months could prove pivotal in shaping the strength of the government’s charges against Kwon.
In the meantime, the court has established the following pretrial deadlines:
- Pretrial motions must be filed by July 1, 2025.
- Responses to those motions are due by August 11, 2025.
The Terra collapse remains one of the most devastating events in crypto history, triggering global regulatory scrutiny and legal action against crypto executives. The US government’s aggressive pursuit of Kwon signals a broader crackdown on financial misconduct in the digital asset space.
With the trial still nearly two years away, the case against Kwon could set a new precedent for crypto-related fraud investigations—raising the stakes not just for Terraform Labs, but for other high-profile figures in the industry.
Will Kwon’s defense team manage to counter the mounting evidence against him, or will this new discovery seal his fate? The legal battle is far from over, and its outcome could reshape the future of crypto accountability.
