#MarketTurbulence
The recent decline in the crypto market is due to what?
Do Kwon admits guilt
Do Kwon, the co-founder of Terraform Labs (which launched the TerraUSD and LUNA cryptocurrencies), pleaded guilty to two federal charges in U.S. court, related to conspiracy to commit commodity and securities fraud and wire fraud, following a $40 billion collapse in 2022 attributed to the company's failing tokens.
Settlement and penalty details
As part of the agreement, the prosecution agreed to recommend no more than 12 years in prison, although federal guidelines suggest a sentence of up to 25 years. Do Kwon also agreed to forfeit assets exceeding $19 million and to lose ownership in Terraform Labs and its cryptocurrencies. Sentencing is scheduled for December 11, 2025.
This case is considered one of the most prominent fraud cases in the history of the cryptocurrency market, as Do Kwon exploited what is described as the "investment frenzy" around stablecoins and technology to achieve massive profits before the system collapsed.
Involved parties Terraform Labs, and the TerraUSD and LUNA tokens
Estimated losses Approximately $40 billion (collapse of token values and the project)
Charges filed Conspiracy to commit commodity and securities fraud, and wire fraud
Legal implications Guilty plea, agreement on a sentence not exceeding 12 years, forfeiture of assets exceeding $19 million
