based on materials from the site - By The Crypto Times

Do Kwon pleaded guilty to two counts of fraud brought by U.S. authorities related to the collapse of Terra

Do Kwon, a 33-year-old South Korean entrepreneur behind Terraform Labs, pleaded guilty to two criminal charges in the U.S.: wire fraud and conspiracy to commit fraud, previously denying his guilt.

The plea was entered on Tuesday in the Southern District of New York by Judge Paul Engelmayer, ending months of preparation for a trial that was expected in 2026. According to prosecutors, the agreement could mean a shorter sentence than the maximum allowed.

According to a Reuters report, Kwon was charged with nine counts by U.S. authorities, including securities fraud and money laundering. By pleading guilty to two of them, he avoided trial on the others.
Prosecutors and Kwon's attorneys reached an agreement that includes a $19 million fine. If the judge follows the legal maximum, Kwon could face up to 25 years in prison, but according to the agreement, the prosecution will not seek more than 12 years. Sentencing is scheduled for December 11, 2025.

In court, Kwon apologized. 'I made false and misleading statements about the reasons for restoring the peg, not disclosing the trading firm's role in restoring that peg,' he told the judge. 'I acted wrongly.' His case is one of several high-profile prosecutions of figures in the cryptocurrency industry following the massive market crash in 2022.

Prosecutors stated that in 2021, Kwon misled investors about why TerraUSD, the stablecoin he helped create, restored its value to $1 after a brief drop. They claimed he asserted that an algorithm called 'Terra Protocol' fixed the price, but in reality, a high-frequency trading firm secretly bought tokens worth millions of dollars to inflate their value.

Prosecutors allege that these actions contributed to increased investments, leading to the price of Luna, another token pegged to TerraUSD, rising to $50 billion by early 2022.

After the collapse of Terra, which wiped out about $40 billion, Kwon's whereabouts remained unknown for several months. Montenegrin authorities eventually arrested him for traveling on forged documents. He served four months in prison there while the U.S. and South Korea sought his extradition. He was brought to the U.S. in January 2025 and remained in custody without bail.
In 2024, Kwon and Terraform Labs reached a settlement with the U.S. Securities and Exchange Commission for $4.55 billion. As part of this settlement, Kwon agreed to a civil penalty of $80 million and a ban on cryptocurrency operations.
Meanwhile, he still faces criminal charges in South Korea. Prosecutors in New York stated they would not oppose his request to serve part of his sentence in South Korea after he serves half of his time in the U.S.

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