Do Kwon pleads guilty to defrauding crypto investors in $40 billion Terra collapse
Key Takeaways
- Do Kwon pleaded guilty to two counts of wire fraud and conspiracy to defraud in the US District Court for the Southern District of New York.
- He faces up to 25 years in prison, with prosecutors recommending 12 years if he complies with his plea agreement.
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Kwon Do-Hyung, known publicly as Do Kwon and co-founder of Terraform Labs, admitted guilt today in Manhattan federal court to charges of conspiracy to defraud and wire fraud tied to the 2022 collapse of TerraUSD and Luna tokens, which wiped out $40 billion in value, according to a report from Inner City Press.
Appearing before US District Judge Paul Engelmayer, Kwon acknowledged the charges and penalties outlined in his plea agreement. The 33-year-old Singapore-based entrepreneur faces up to 25 years in prison for his role in one of the largest digital asset collapses in history.
The plea marks a sharp reversal from January, when Kwon pleaded not guilty to a nine-count indictment that included securities fraud, wire fraud, commodities fraud, and money laundering conspiracy. Prosecutors accused him of misleading investors about TerraUSD, a so-called stablecoin that was meant to maintain a $1 peg.
Under the plea agreement, Kwon agreed to financial penalties exceeding $19 million and asset forfeitures. While guidelines cap his sentence at 25 years, prosecutors will recommend no more than 12 years if he accepts responsibility and avoids new crimes.
This is a developing story.
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