13.08.2025 01:19

Do Kwon, co-founder of Terraform Labs, has ended months of legal battles by pleading guilty to conspiracy to commit fraud and wire fraud in connection with the collapse of the TerraUSD and Luna cryptocurrencies. This plea agreement, accepted in a Manhattan court before Judge Paul Engelmayer, significantly alters the trajectory of the case, originally slated for a lengthy trial in January 2026.

The agreement stipulates that Kwon will forfeit the right to appeal his sentence provided it does not exceed 25 years. Importantly, prosecutors have indicated a potential reduction to a 12-year sentence, contingent upon demonstrable remorse and a clean record moving forward. This outcome avoids a protracted and complex trial that would have examined nine initial counts, including accusations of securities and commodities fraud, and money laundering conspiracy, all of which Kwon had previously denied.

Judge Engelmayer personally confirmed Kwon’s understanding and acceptance of the plea agreement, including a waiver of his right to challenge the factual claims within the indictment. Kwon's admission of guilt effectively concludes a protracted legal saga stemming from the devastating 2022 collapse of TerraUSD, an algorithmic stablecoin purportedly pegged to the US dollar.

Prosecutors maintain that Kwon deliberately misled investors throughout 2021, falsely assuring them of TerraUSD's stability through allegedly automated mechanisms. This deception, they argue, was a crucial element leading to the catastrophic failure of both TerraUSD and Luna, resulting in billions of dollars in losses for investors globally. The plea deal, therefore, represents a resolution that spares both the court and the affected parties a lengthy and potentially costly trial, while still holding Kwon accountable for his actions. A sentencing date has yet to be determined. The information presented here is derived from internet sources.