PANews reported on January 9 that according to The Block, Terraform Labs founder Do Kwon appeared in the United States District Court for the Southern District of New York on Wednesday. This was his second appearance, marking the entry of this high-profile and repeatedly postponed federal case into the evidence disclosure stage. If he is found guilty of the collapse of the TerraUST stablecoin, he will face up to 130 years in prison. Wednesday's "initial meeting" aims to determine whether the US case can be resolved without a trial and to determine other pre-trial details. 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 the parties submitted 6 terabytes of evidence for discovery, including four cell phones, social media accounts and other non-public information that Kwon had with him while in prison in Montenegro, much of which needs to be translated and decrypted. Prosecutors said some of the data may have been collected without a search warrant and that encryption keys appear to be "lost."
Prosecutor Jared Lenow noted that the trial could last up to six weeks, with prosecutors taking four weeks alone. The judge also questioned whether securities laws would play a significant role in Kwon's case, saying "the jury needs to have an extremely clear understanding." Prosecutors said whether Bitcoin or USDT is a commodity is not important to their case, noting that District Judge Jed Rakoff ruled in a previous case that "Terraform's crypto assets are investment contracts."
