Do Kwon, the South Korean co-founder of Terraform Labs and the architect behind the failed TerraUSD stablecoin and Luna cryptocurrency, has pleaded guilty in a New York court to charges of conspiracy to commit fraud and wire fraud. The case stems from the dramatic $40 billion collapse of TerraUSD in 2022, one of the largest failures in cryptocurrency history.
Key Details from the Courtroom
Admission of Wrongdoing
Kwon publicly apologized and admitted to misleading investors about TerraUSD’s stability, acknowledging that the token’s value was secretly propped up by a trading firm rather than relying solely on its advertised algorithmic system.Potential Sentence
He faces a maximum of 25 years in prison, but under a plea agreement, prosecutors are recommending no more than 12 years if he demonstrates full accountability.Previous Settlements
Prior to this criminal plea, Kwon had settled with the U.S. Securities and Exchange Commission in 2024, agreeing to an $80 million fine and a ban from participating in the crypto industry. This was part of a wider $4.55 billion settlement involving Terraform Labs.Next Steps
Sentencing is scheduled for December 11, 2025, when the court will decide whether to follow the plea agreement’s recommendation or impose a stricter punishment.
Broader Impact
Kwon’s guilty plea is seen as a landmark moment in crypto regulation, highlighting that even the most high-profile industry leaders can be held accountable. It also underscores the growing scrutiny of algorithmic stablecoins and the need for stronger investor protection measures.
