12.08.2025 20:46

Do Kwon, the former CEO of Terraform Labs, has admitted guilt on two counts of fraud and conspiracy, marking a significant development in the aftermath of the devastating TerraUSD collapse. This plea bargain, reached with US prosecutors, concludes a period of denial, as Kwon initially pleaded not guilty to these charges. The agreement, revealed during an August 12th court hearing reported by Inner City Press, sees Kwon forfeiting his right to trial on these specific counts.

The prosecution's recommendation includes a 12-year prison sentence and a substantial $19 million fine. However, Judge Paul A. Engelmayer retains the authority to impose a sentence ranging up to 25 years, the maximum penalty permissible under the court's sentencing guidelines. This reflects the gravity of the accusations, which center around a cryptocurrency scheme that defrauded investors. The significant loss incurred by investors, estimated to be $45 billion, further underscores the far-reaching consequences of Kwon’s actions.

These two charges are directly linked to the catastrophic May 7, 2022, market crash that saw the TerraUSD stablecoin lose its peg to the US dollar, resulting in the plummeting value of the LUNA cryptocurrency. The scheme, active from 2018 to 2022, impacted a vast number of investors, numbering in the millions. Kwon’s plea covers the charges of wire fraud and conspiracy to commit fraud, although seven additional related charges remain pending a future trial. He now awaits sentencing, scheduled for December 2025.

The guilty plea signifies a crucial step in the legal proceedings, although Kwon's legal battles are far from over. The pending charges and the judge’s ultimate sentencing decision will determine the full extent of his punishment. This case serves as a stark reminder of the risks inherent in the volatile cryptocurrency market and the severe consequences that can befall those who perpetrate fraudulent schemes. The information in this account was gathered from internet sources.