In a Wednesday status conference, the judge overseeing the Terraform Labs co-founder’s case reportedly said he was “mindful of the GENIUS Act.”
Terraform Labs co-founder Do Kwon, facing criminal charges in US federal court, could see a change in his indictment based on bills currently moving through the US Congress.
According to reporting from Inner City Press, Kwon’s lawyers and prosecutors met for a status conference before Judge Paul Engelmayer in the US District Court for the Southern District of New York on Wednesday. The judge reportedly said he was “mindful of the GENIUS Act,” suggesting that it could impact Kwon’s charges on securities fraud.
The GENIUS Act, or the Guiding and Establishing National Innovation for US Stablecoins, passed the US Senate on June 17, but still faces a possible vote in the House of Representatives before US President Donald Trump decides whether to sign the bill into law. The legislation, targeting regulations for payment stablecoins, could affect Kwon’s charges related to the TerraUSD (UST) algorithmic stablecoin and the platform’s LUNA token.
Terra’s UST depegged from the dollar in 2022, likely contributing to the crash of the ecosystem and leading to authorities in South Korea and the US pursuing criminal charges against Kwon and other executives.
The Terraform Labs co-founder was arrested in Montenegro in 2023 on charges unrelated to crypto, and, after numerous delays in court, was extradited to the US in December to face nine felony counts related to securities fraud, commodities fraud, market manipulation and money laundering.
Kwon has pleaded not guilty to all charges and is being held without bail. As of April, his criminal trial is expected to begin in January 2026.
Related: Number of Do Kwon’s victims could exceed one million — Court filing
In 2024, a jury found Terraform Labs and Kwon liable for defrauding investors as part of a civil case with the Securities and Exchange Commission (SEC). Judge Engelmayer was reportedly exploring whether the rulings in the civil case would be binding on Kwon’s criminal case.
Will the GENIUS Act become US law?
After passing the Senate, the GENIUS Act is being held in the House of Representatives for consideration. The bill’s companion, the Stablecoin Transparency and Accountability for a Better Ledger Economy, or STABLE Act, is also moving through the House as both chambers consider legislation for digital asset market structure.
Any of the bills could affect how US financial regulators like the SEC and the Commodity Futures Trading Commission and authorities treat cases involving digital assets.
In February, former SafeMoon CEO Braden John Karony’s legal team asked a judge to delay his criminal trial for conspiracy to defraud the United States, money laundering and wire fraud, on the assumption that Trump could direct changes in securities laws affecting his charges. Karony was found guilty on all charges in May.
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