U.S. prosecutors have unveiled that the fallout from the Terra/LUNA collapse may have affected over one million people and entities worldwide.
This figure was revealed in court documents filed on January 6, in the ongoing criminal case against Do Kwon.
Mass destruction
Acting U.S. Attorney Daniel Gitner explained that traditional methods of notifying victims won’t cut it this time, given the sheer number involved, so to tackle this, the government plans to launch a dedicated website to keep everyone updated on public proceedings.
The court filing highlights the difficulties prosecutors face in managing such a massive case, because many Terra/LUNA investors traded through foreign exchanges or used anonymous crypto wallets, making it tough to notify them in the usual ways.
Kwon is in trouble
After pleading not guilty to nine felony charges related to the Terra/LUNA collapse during his January 2 court appearance, Kwon is currently being held in detention while awaiting trial.
The charges stem from the catastrophic May 2022 collapse of Terraform Labs’ ecosystem, which prosecutors claim resulted in over $40 billion in losses and triggered a wider crypto market downturn, often called as crypto winter.
This criminal case adds to Kwon’s legal woes, as back in April 2024, he and Terraform Labs were found liable for fraud in a civil case brought by the SEC, resulting in $4.5 billion penalty.
There must be justice
Kwon’s process to facing U.S. charges has been anything but smooth, especially after his arrest in Montenegro on passport-related issues in 2023, both U.S. and South Korean authorities sought his extradition.
It wasn’t until December 2024 that Montenegrin officials decided to send him to the U.S., giving prosecutors extra time to build their case and examine the level of impacts of the collapse on global crypto markets.
The Terra/LUNA disaster sent actual shockwaves through the crypto world, leading several companies to file for bankruptcy as market instability spread like wildfire.
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