Terraform Labs co-founder Do Kwon is scheduled to be tried on Jan. 26, 2026, according to a status conference following his extradition to the US, Inner City Press reported on Jan. 8.

The court has scheduled a pretrial conference for Mar. 6, 2025, with updates due by Feb. 27. Judge Paul Engelmayer has encouraged plea discussions. However, both parties anticipate the case will proceed to trial.

Federal prosecutors argued that the Terraform ecosystem was built on deceptive practices. Assistant US Attorney Jared Lenow described Terraform’s operations as a “Potemkin village,” alleging that the company’s products were unstable and required manipulation to sustain their value. 

He added that Kwon misrepresented the stability of the algorithm stablecoin TerraUSD (UST).

The indictment outlines multiple fraud and securities violations, including counts pertaining to Kwon’s alleged misrepresentation of TerraUSD’s stability. Earlier counts address other aspects of Terraform’s operations. 

The defense, led by attorney Michael Ferrara, argues that Terraform’s products were legitimate and functioned as described until market sentiment shifted. Ferrara contended that TerraUSD’s stability relied on demand, which evaporated during a panic.

He added: 

“As long as people wanted it, it would be stable.”

The defense also plans to challenge the admissibility of evidence obtained through international cooperation and search warrants.

Monthly length

The trial, expected to last four to six weeks, will address foundational questions about crypto’s classification under US law. Prosecutors assert that LUNA, Terra’s ecosystem native token, qualifies as a security, a contention that could have far-reaching implications for the crypto industry. 

Defense attorneys, however, argue that Terraform’s tokens do not meet the criteria established under the H

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Author: Gino Matos