Do Kwon, founder of Terraform Labs, has pleaded guilty to fraud charges associated with the collapse of his crypto empire. This decision marks a significant turning point in a case that began with a disaster in 2022.
Guilty Plea and Its Consequences
The 33-year-old reversed his not-guilty plea in Manhattan court following extradition from Montenegro. Kwon expressed remorse, stating, 'What I did was wrong and I want to apologise for my conduct.' He also agreed to forfeit more than $19 million as part of the deal.
Charges and Details of the Collapse
The indictment filed in January accuses Kwon of 'orchestrating schemes to defraud purchasers of cryptocurrencies.' Prosecutors assert that Terraform's main products did not function as claimed while Kwon heavily promoted them to inflate the value of coins he owned. The collapse of TerraUSD and Luna in 2022 led to billions in losses and triggered the so-called 'crypto winter' of that year.
Legal Consequences and Connections to Other Cases
Kwon's guilty plea includes conspiracy to commit securities fraud, wire fraud, and commodities fraud. He faces a maximum sentence of 25 years, although the U.S. government indicated it will seek no more than 12 years. The judge warned that as a non-U.S. citizen, Kwon will likely be deported after serving his sentence.
Kwon's sentencing in December will close one chapter of a significant case in the history of cryptocurrencies, leaving many questions about regulation and accountability in the industry.
