GENIUS Act Could Impact Do Kwon’s US Charges In Terraform Case

HomeNews* Do Kwon, co-founder of Terraform Labs, is currently facing criminal charges in New York federal court related to the collapse of TerraUSD (UST) and Luna.

• The U.S. Senate has passed the GENIUS Act, a bill that could affect how authorities charge Kwon for securities fraud involving stablecoins.
• Kwon’s trial is set for January 2026, and he is being held without bail after his extradition from Montenegro to the United States in December 2023.
• A civil court previously found Terraform Labs and Kwon liable for defrauding investors, and the judge is considering if those findings impact the ongoing criminal case.
• Additional stablecoin and digital asset regulation bills, including the STABLE Act, are under review in Congress and could shape future crypto-related legal cases. Terraform Labs co-founder Do Kwon is facing criminal prosecution in the U.S. District Court for the Southern District of New York, with his current charges possibly impacted by new legislation progressing in Congress. A status conference between Kwon’s legal team and prosecutors occurred before Judge Paul Engelmayer, who noted the possible influence of the newly passed GENIUS Act on the case.

• Advertisement - The GENIUS Act, also known as the Guiding and Establishing National Innovation for US Stablecoins, cleared the Senate on June 17. The bill is now pending a House vote, after which the President may sign it into law. This legislation sets rules for payment stablecoins like TerraUSD (UST), which is linked to Kwon’s charges involving alleged securities fraud, commodities fraud, market manipulation, and money laundering.

Judge Engelmayer referenced the GENIUS Act when he stated he was “mindful of” its potential effect on the charges, specifically those related to securities fraud. Kwon’s legal team and prosecutors discussed that the bill could impact how criminal charges tied to stablecoins are pursued, as reported by Inner City Press in a public post.

Kwon was extradited from Montenegro to the United States in December 2023 after being detained on unrelated charges. He faces nine felony counts following the 2022 collapse of the TerraUSD (UST) stablecoin, which lost parity with the U.S. dollar and contributed to the broader crash of the Terra ecosystem. Both South Korean and U.S. authorities have filed criminal charges against Kwon and other executives.

In 2024, a jury found Terraform Labs and Kwon responsible for defrauding investors in a civil case brought by the Securities and Exchange Commission (SEC). The presiding judge is now determining whether the civil verdicts will influence the criminal proceedings. Kwon has pleaded not guilty. His criminal trial is scheduled to begin in January 2026.

Additional legislative proposals, such as the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act, are moving through the House as part of broader efforts to establish the regulatory environment for digital assets. Any new laws could alter how agencies like the SEC and Commodity Futures Trading Commission (CFTC) prosecute similar cases in the future.

In a related legal development, former safemoon CEO Braden John Karony attempted to postpone his criminal trial in light of potential executive changes to securities laws, though he was ultimately convicted on all charges in May.

• Advertisement - #### Previous Articles:

• Trojanized SonicWall NetExtender Targets VPN Users for Credential Theft
• Republic to Offer Mirror Tokens Tracking SpaceX, Anthropic to Retail Investors
• Bitcoin Surges to $107K as Fed Rate Cut Hopes, Geopolitical Fears Ease
• CoinDesk 20 Index Rises 0.5% as BCH, SOL Lead; APT, AAVE Lag
• Pro-Iran Hacktivists Leak Saudi Games Athlete, Visitor Data Online

• Advertisement -