Prosecutors Estimate Over 1 Million Victims in Terra Collapse

U.S. prosecutors have revealed that the collapse of Terraform Labs’ TerraUSD and Luna cryptocurrencies may have impacted over one million individuals and entities worldwide.

In a court filing submitted Monday, Acting U.S. Attorney Daniel Gitner described the scale of the alleged fraud as staggering, estimating the number of victims to be in the hundreds of thousands, potentially exceeding a million.

Prosecutors allege that former Terraform Labs CEO Do Kwon orchestrated the Terra ecosystem on a foundation of deception, using misleading tactics to present the project as a legitimate and stable financial platform. The collapse of TerraUSD and Luna reportedly led to investor losses exceeding $40 billion.

Due to the sheer number of potential victims, prosecutors deemed it unfeasible to notify each affected party individually. Instead, they have requested court approval to publish public notices online to inform victims of their rights and the ongoing proceedings.

Do Kwon, who was extradited from Montenegro to the United States last week, faces a series of criminal charges, including securities fraud, wire fraud, commodities fraud, money laundering conspiracy, and more. If convicted on all counts, he could face a maximum sentence of 130 years in prison.

Kwon pleaded not guilty during his court appearance in New York last week. His next hearing is scheduled for January 8, as the legal process unfolds in one of the largest alleged crypto fraud cases to date.