Do Kwon's victims may number over one million

Prosecutors have estimated that the number of victims affected by the collapse of Terraform Labs could exceed one million globally, according to a recent court filing in the United States.

On January 6, Acting US Attorney Daniel Gitner filed a notification in the US District Court for the Southern District of New York, informing the court of the procedures to notify the victims of their rights in Do Kwon’s criminal case.

The government has acknowledged the difficulty in precisely quantifying the number of victims, given the sheer volume of transactions and the nature of digital asset exchanges, many of which occurred on foreign platforms.

However, Gitner noted that the number of victims “exceeds hundreds of thousands of individuals and entities, and potentially totals more than one million.”

The collapse of the Terra ecosystem in 2022 contributed to a significant downturn in the cryptocurrency market, affecting numerous investors and entities.

Kwon, who is facing nine felony charges related to fraud at Terraform Labs, was arrested in Montenegro in 2023 on unrelated charges and subsequently extradited to the US in January 2024.

During his first appearance before a US judge on January 2, Kwon pleaded not guilty to all charges and agreed to remain in detention.

The filing also highlighted the challenges of notifying victims, especially as many transactions were conducted anonymously through digital wallets and crypto exchanges.

In light of this, the US government plans to establish a website to inform victims about public proceedings in Kwon’s case.

Kwon’s case follows the criminal charges brought against other high-profile crypto executives, including former FTX (CRYPTO:FTT) CEO Sam Bankman-Fried and former Celsius (CRYPTO:CEL) CEO Alex Mashinsky.

The Terra collapse in 2022 led to the bankruptcy of several firms, marking one of the most significant events in the crypto market downturn.

The US Securities and Exchange Commission had previously found Kwon and Terraform liable for fraud in a civil case and ordered them to pay $4.5 billion in penalties.