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Terraform founder Do Kwon's trial set for January 2026

Terraform founder Do Kwon's trial set for January 2026
Terraform founder Do Kwon's trial set for January 2026

The criminal trial of Terraform Labs founder Do Kwon, who faces up to 130 years in prison if convicted on nine charges related to the collapse of his TerraUST stablecoin, has been scheduled to begin on January 26, 2026.

U.S. District Judge Paul Engelmayer, presiding over the case in the Southern District of New York, noted that setting a trial date nearly two years after the initial conference was "unprecedented" but justified given the complexity of the evidence and Kwon's additional legal challenges abroad.  

Prosecutors and defense attorneys highlighted the vast scope of evidence, including six terabytes of data from Kwon’s devices, social media accounts, and encrypted files. Prosecutors allege that Kwon knowingly misled investors about the stability of TerraUST, despite internal knowledge of its vulnerabilities.  

Legal complexities and industry fallout 

Kwon’s case is one of several high-profile crypto-related trials in New York, alongside those of FTX founder Sam Bankman-Fried and Celsius CEO Alex Mashinsky. Prosecutors accuse Kwon of constructing a “Potemkin village” around his algorithmic stablecoin, which collapsed in 2022, wiping out $40 billion in market value and triggering a chain reaction that led to multiple crypto firm bankruptcies.  

Notably, the prosecution referenced allegations from a U.S. Securities and Exchange Commission case that Kwon colluded with external firms to temporarily stabilize TerraUST’s peg, even as he publicly touted its reliability. The trial, expected to span six weeks, will delve into securities law issues and whether Terraform’s crypto assets qualify as investment contracts.  

The judge urged both parties to consider plea negotiations, which the defendant currently denies, citing the $4.5 billion in penalties imposed on Kwon and Terraform in a prior civil case. However, the criminal trial could set a precedent for future crypto fraud cases and influence the regulatory landscape of the industry.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.

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