U.S. prosecutors estimate that Do Kwon, co-founder of Terraform Labs, could potentially have one million victims all around the globe following the downfall of the Terra ecosystem. This claim was made before a New York City court on Jan. 6, 2025, where Kwon is facing nine counts of felony relating to fraud at Terraform Labs. In the document submitted by acting U.S. attorney Daniel Gitner , the government outlined its intent to notify victims regarding their rights under the Justice for All Act of 2004. Due to the immense scale and global extent of Terraform Lab’s dissolution, traditional methods of notifying victims were believed to be impractical. Rather, the government proposed to set up a public website for Kwon’s case proceedings. The filing stated: “While it is difficult to precisely quantify the number of Kwon’s victims in light of the sheer number of purchases and sales of Terraform’s cryptocurrencies and the manner of those transactions (with many transactions in those assets occurring on foreign exchanges and through digital asset wallet or crypto trading accounts without personal identifying information), the Government estimates that the number of victims, in this case, exceeds hundreds of thousands of individuals and entities, and potentially totals more than one million.” The Justice for All Act provides that the victim of a federal crime enjoys particular rights such as timely notification of public court proceedings, the opportunity to be heard during sentencing or plea agreements, and the right to restitution if applicable. The Act, however, gives room for the courts to put in place in cases where a large number of victims need to be considered; reasonable procedures are evident in this case. You might also like: KickStreaming X account hacked, now pushing Solana-based crypto scam tokens Do Kwon has had long legal troubles since the collapse of the Terra ecosystem in 2022 , which wiped out billions of dollars in investors’ funds and was a key contributor to the wider downturn of the cryptocurrency market. Kwon was sent to the U.S. in Dec. 2024 after protracted negotiations involving many jurisdictions, including South Korea, following his arrest in Montenegro in 2023 for unrelated charges. On Jan. 2, 2025, Kwon appeared before a U.S. court for the first time and entered a not-guilty plea to the charges against him. He is still being held in custody. Kwon and Terraform Labs were also charged with fraud by the Securities and Exchange Commission in a civil case in April 2024. In this case, he and Terraform Labs were ordered to pay nearly $4.5 billion in disgorgement, civil penalties, and prejudgment interest. Moving forward in the case, the government’s victim notification website is expected to assume a significant role in ensuring compliance with the statutory rights of a victim without overburdening the court processes. For victims, this represents a real step toward transparency and acknowledgment of the harms suffered as a result of the collapse of Terraform Labs. Read more: Pig butchering crypto scams wiped out $3.6b this year: report
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