United States v. Kwon, 23 Cr. 151 (PAE) (Terraform Labs Fraud)

It is the policy of the Department of Justice, consistent with the Crime Victims’ Rights Act, to ensure that crime victims receive “full and timely restitution as provided in law.” See 18 U.S.C. § 3771(c)(1). Accordingly, when the Government seizes property in connection with a criminal case, the Government’s goal is to forfeit the property and then, in remission proceedings administered by the Attorney General through his delegee, the Chief of the Money Laundering, Narcotics and Forfeiture Section (“MNF”), to distribute funds to victims. Frequently MNF will distribute those assets through a remission program by which victims may petition for portions of forfeited property.  In order to qualify for remission, a crime victim must provide information to the Government to support specific elements, including that they suffered a specific pecuniary loss directly caused by the criminal offense, that the victim did not contribute to the offense, that the victim has not been compensated for the loss from another means, and that the victim has no other recourse available. See generally 28 C.F.R. § 9.8(b); Asset Forfeiture Policy Manual, Chapter 14, available at: https://www.justice.gov/criminal/criminal-afmls/file/839521/dl?inline=.

Remission will only be available in this matter once property has been finally forfeited. After the Government has seized, forfeited, and monetized any property in connection with this matter, eligible victims may submit a remission petition using an online form: https://www.forfeiture.gov/PetitionForm.pdf. If you believe you are a victim entitled to remission, please contact Valeen.Defendre@usdoj.gov to have your name included in a database of identified victims so you can receive case updates.

Remission through the Justice Department is separate from the matter pending in Bankruptcy Court associated with Terraform Labs, which may be another avenue by which victims can pursue compensation for their losses. See In re Terraform Labs Pte. Ltd., Case No. 24-10070 (Bankr. D. Del.). Additional information for victims regarding the bankruptcy may be found at the website of the Terraform Labs Pte. Ltd. Wind Down Trust:https://restructuring.ra.kroll.com/Terraform/.

December 12, 2025 Update to Victims

On December 11, 2025, Judge Engelmayer sentenced the defendant, Do Hyeong Kwon, to a term of 15 years’ imprisonment, for committing wire fraud and conspiring to commit securities fraud, commodities fraud, and wire fraud in connection with Kwon’s fraud centered around Terraform Labs PTE, Ltd. (“Terraform”), and the cryptocurrencies launched by Terraform.  In addition to the prison term, Kwon was ordered to forfeit over $19 million in proceeds from his illegal schemes, including his interest in Terraform and its cryptocurrencies.

A press release regarding the sentencing proceeding can be viewed here: https://www.justice.gov/usao-sdny/pr/crypto-enabled-fraudster-sentenced-orchestrating-40-billion-fraud.

If you are a victim seeking eligibility for any potential future compensation, please email Valeen.Defendre@usdoj.gov.

December 1, 2025

Judge Engelmayer scheduled sentencing for December 11, 2025 at 11 am in Courtroom 1305 of the United States Courthouse, 40 Foley Square New York, NY 10007.

If you are a victim, and would like to send the Judge presiding over this case a victim impact statement, which describes how this crime impacted you and your family, your statement can be emailed to Valeen.Defendre@usdoj.gov.  The Court will consider any statements sent in connection with sentencing of defendant Do Kwon.

If you are a victim, and would like to speak at Do Kwon’s sentencing hearing, to describe to the Judge how Do Kwon’s crimes impacted you and your family please email Valeen.Defendre@usdoj.gov.

Victim Notice in United States v. Do Hyeong Kwon, 23 Cr. 151 (PAE), assigned to U.S. District Judge Paul A. Engelmayer

The defendant, Do Hyeong Kwon, is alleged to have orchestrated schemes to defraud purchasers of cryptocurrencies issued by Terraform Labs PTE, Ltd. (“Terraform”), such as LUNA and TerraUSD.  Among other things, Kwon is alleged to have made false and misleading claims regarding the stability and efficacy of Terraform’s cryptocurrency stablecoin protocol, its use of blockchain technology, and its development of functioning and reliable financial technologies.

The next status conference in this matter will take place March 6, 2025, at 11 am, at the Thurgood Marshall U.S. Courthouse, 40 Foley Square, New York, New York, Courtroom 1305.  Trial in this matter is scheduled to begin on January 26, 2025.

The alleged victims of Kwon’s crimes have the following rights:

1. The right to be reasonably protected from the accused.
2. The right to reasonable, accurate, and timely notice of any public court proceeding, or any parole proceeding, involving the crime or of any release or escape of the accused.
3. The right not to be excluded from any such public court proceeding, unless the court, after receiving clear and convincing evidence, determines that testimony by the victim would be materially altered if the victim heard other testimony at that proceeding.
4. The right to be reasonably heard at any public proceeding in the district court involving release, plea, sentencing, or any parole proceeding.
5. The reasonable right to confer with the attorney for the Government in the case.
6. The right to full and timely restitution as provided in law.
7. The right to proceedings free from unreasonable delay.
8. The right to be treated with fairness and with respect for the victim’s dignity and privacy.
9. The right to be informed in a timely manner of any plea bargain or deferred prosecution agreement.
10. The right to be informed of the rights stated herein and the services described in section 503(c) of the Victims’ Rights and Restitution Act of 1990 and provided contact information for the Office of the Victims’ Rights Ombudsman of the Department of Justice.

The United States Attorney’s Office for the Southern District of New York is committed to protecting the rights of crime victims. If you believe you are a victim of the offense charged, our Victim/Witness Unit can make sure that you are notified of important stages of the case to help you exercise your rights. In addition, our Victim/Witness Unit can help refer you to agencies that provide other services to witnesses, such as compensation (under certain circumstances) and counseling. If you believe you are a victim, of if you would like information or assistance with referrals, please contact:  Valeen.Defendre@usdoj.gov.