TechFlow news — On January 9, according to The Block, Terraform Labs founder Do Kwon appeared in federal court for the Southern District of New York on Wednesday, marking his second court appearance. The Wednesday "initial conference" aimed to determine whether the U.S. case could be resolved without trial and to establish other pretrial details. If convicted in connection with the collapse of the TerraUST stablecoin, he faces up to 130 years in prison. U.S. District Judge Paul Engelmayer set the trial start date for January 26, 2026, and encouraged plea negotiations.
The U.S. government noted that both parties have submitted 6 TB of discovery materials for review, including four phones carried by Kwon while imprisoned in Montenegro, social media accounts, and other non-public information—most of which requires translation and decryption. Prosecutors stated that some data may have been collected without search warrants, and the encryption keys appear to be "lost."
Prosecutor Jared Lenow indicated the trial could last up to six weeks, with the prosecution alone requiring four weeks. The judge also questioned whether securities laws would play a significant role in Kwon's case, stating that "the jury will need an extremely clear understanding." Prosecutors said it does not matter to their case whether Bitcoin or USDT are commodities, pointing out that District Judge Jed Rakoff previously ruled in another case that "Terraform's crypto assets were investment contracts."
