11.08.2025 20:24
Do Kwon, the co-founder of Terraform Labs, may alter his not guilty plea in a significant development in the ongoing US criminal case surrounding the catastrophic 2022 collapse of the Terra ecosystem. This potential plea change follows his extradition from Montenegro and the subsequent filing of nine serious felony charges against him.
A Tuesday hearing, scheduled by Judge Paul Engelmayer of the US District Court for the Southern District of New York, will determine whether Kwon will indeed plead guilty. Court documents released on Monday revealed that Kwon's legal team indicated a possible shift in his legal strategy. The judge has explicitly requested Kwon be prepared to deliver a detailed statement, outlining his acceptance of guilt on all charges, a statement which will be presented in open court.
Initially pleading not guilty in January to these charges, which include a range of serious financial crimes such as conspiracy to defraud, commodities and wire fraud, securities fraud, market manipulation, and money laundering conspiracy, Kwon now faces the possibility of a conviction. US prosecutors contend that Kwon masterminded the scheme involving TerraUSD (UST), an algorithmic stablecoin whose collapse in May 2022, triggered a devastating $40 billion market crash. This collapse resulted from the failure of the algorithmic mechanism designed to maintain UST's dollar peg, implemented alongside its sister token, Luna.
The ramifications of the Terra implosion extended far beyond the immediate crypto community, significantly impacting global cryptocurrency markets, leading to widespread bankruptcies and substantial market instability. This upcoming court hearing is highly anticipated and will undoubtedly shape the future of this high-profile case. Information for this report was gathered from internet sources.
