Terra Founder Do Kwon Fraud Case: May Change His 'Not Guilty' Defense Position in U.S. Court
According to the Southern District Court of New York, Terraform Labs founder Do Kwon may change his 'not guilty' defense position at a hearing scheduled for this Tuesday local time. This development marks a potential key turning point in this significant case that has shaken the cryptocurrency industry.
The case traces back to the collapse of the Terra/Luna ecosystem in 2022. At that time, the algorithmic stablecoin TerraUSD lost its peg, and its associated token LUNA plummeted in value, leading to the collapse of the ecosystem token that was once valued at over $18 billion within a few days.
Kwon was extradited to the U.S. at the end of 2024 after being arrested in Montenegro for using a forged passport, following a lengthy extradition battle. Prosecutors have charged Kwon with multiple counts of fraud and market manipulation related to Terraform's operations, with the original trial date set for January next year.
Notably, the U.S. Securities and Exchange Commission (SEC) had previously ruled in a civil lawsuit that Do Kwon committed fraud in the Terraform Labs case, imposing a $4.5 billion fine and restitution order. Should a plea agreement be reached in this criminal case, it could have far-reaching implications for Kwon personally and the entire cryptocurrency industry.
According to the court's case receipt, Judge Engelmayer has required the defense attorney to communicate and confirm the contents of the plea agreement with Kwon before the hearing, aimed at ensuring Kwon fully understands all legal consequences that may arise from a guilty plea.
However, the judge did not specify the exact charges Kwon might plead guilty to in the order, nor did it reveal whether prosecutors and the defense team have reached a final agreement on the terms of the plea.
Legal experts point out that the uniqueness of this case lies in its involvement in both civil and criminal lawsuits, and the scale of the fines sets a new high in the cryptocurrency field. Although Kwon's defense attorney has not yet responded to requests for comments, the market generally believes that the likelihood of him pleading guilty is high.
Overall, if Kwon ultimately chooses to plead guilty, it will not only impact his personal fate but may also set an important precedent for subsequent regulations and legal matters.
Currently, the cryptocurrency industry is closely monitoring the progress of this case, especially its regulatory impact on algorithmic stablecoins and other decentralized finance projects.
