12.08.2025 16:10

Do Kwon, the 33-year-old co-founder of Terraform Labs, dramatically altered his legal strategy today, pleading guilty in a Manhattan federal court to charges stemming from the catastrophic 2022 collapse of the TerraUSD and Luna tokens. This stunning admission of guilt, before US District Judge Paul Engelmayer, concludes a period of staunch denials and marks a significant turning point in the case that decimated an estimated $40 billion in investor funds.

Two counts of wire fraud and conspiracy to defraud form the basis of Kwon's plea agreement. This admission carries with it a maximum potential sentence of 25 years imprisonment, although prosecutors have indicated they will recommend a sentence of 12 years provided he adheres to the terms of his agreement and demonstrates continued cooperation. The plea agreement also includes significant financial penalties exceeding $19 million and the forfeiture of various assets.

This confession represents a stark contrast to Kwon’s previous stance. In January, he vehemently rejected all nine counts of the initial indictment, which also included accusations of securities fraud, commodities fraud, and money laundering conspiracy. The indictment centered on allegations that Kwon deceptively misrepresented TerraUSD, a so-called stablecoin designed to maintain a consistent $1 value, thus misleading investors.

Kwon's plea brings a significant chapter to a close in the ongoing saga of one of the most devastating crypto market crashes in history. While the details are still unfolding and the full ramifications remain to be seen, this development offers some measure of closure for the many victims of the Terra ecosystem's collapse. Information from internet sources indicates that this case continues to evolve.