US Prosecutor Says Victims of the Terra LUNA Collapse Could Run into Millions

A recent court filing by US prosecutors claims the impact of Do Kwon’s Terra LUNA collapse may have extended to millions of investors. Terra founder Do Kwon’s trial has not kicked off properly, and the US prosecutors are already releasing big statements. One of which is the latest assertion from Daniel Gitner, US Attorney, that the 2022 Terra collapse affected millions of users. In a filing with a New York District Court on January 6, US prosecutors estimated the number of well-meaning investors exposed to the Terra fallout two years ago. Per the disclosure, the number of entities affected by the collapse exceeded hundreds of thousands and could run into millions. Weighty Legal Proceedings on the Cards Terraform Labs' co-founder, Do Kwon, will be embroiled in a lengthy legal case following the latest disclosure. Kwon was allegedly involved in the capitulation of the project’s algorithmic stablecoin, TerraUSD. The stablecoin depegged in 2022, sparking the notorious crash of the network’s native token, LUNA. As a result, the implosion wiped out over $40 billion from the cryptocurrency market and catalyzed a series of bankruptcy filings from major digital asset firms considerably exposed to the ecosystem. Meanwhile, with the case still new, the prosecutors stated that converging victims of the fallout for a fair trial was unrealistic due to the large number. However, the government proposed creating a website to update affected entities on the legal process. Furthermore, the prosecuting council will allow victims exposed to the $40 billion wipeout to participate in the legal process. Interested parties can come forward and testify against Do Kwon and Terraform with evidence. Do Kwon Risks Lengthy Jail Time The Terra Lab co-founder began his trial on January 2, when he pleaded not guilty to seven charges, including two commodities and securities fraud counts, respectively. The trial came after the US successfully extradited Kwon from Montenegro after months of tussle with South Korea. If convicted, Do Kwon could face up to 50 years of imprisonment. That would be more than FTX’s Sam Bankman-Fried, who got 25 years for his involvement in the exchange’s implosion the same year. Meanwhile, the South Korean national will face trial in the same jurisdiction that tried SBF, Binance’s Changpeng Zhao, and former Celsius CEO Alex Mashinsky. He will appear in court on Wednesday to continue the legal proceedings.