Terraform Labs founder Do Kwon has pleaded guilty to two criminal charges related to the collapse of TerraUSD and Luna, amounting to $40 billion.
Plea Change and Court Proceedings
At a hearing in the Southern District of New York, Do Kwon pleaded guilty to fraud and wire fraud. Under the plea deal, prosecutors are willing to recommend a maximum sentence of 12 years in prison. If he had not pleaded guilty, he could have faced a maximum of 135 years on nine original charges.
Details of the Do Kwon Charges
Prosecutors accused Kwon of misleading investors about the stability of TerraUSD in 2021. The stablecoin was supposed to maintain a $1 value but collapsed in May 2022. Kwon admitted making false statements regarding the recovery process and acknowledged participating in a scheme to defraud purchasers of cryptocurrencies issued by Terraform Labs between 2018 and 2022.
Background and Ongoing Legal Issues
Following the collapse of the Terra ecosystem, Kwon went missing for several months. He was arrested by Montenegrin authorities in March 2023 on suspicion of traveling with forged documents. After spending four months in jail, he was extradited to the United States. Kwon continues to face legal action in South Korea related to similar charges.
Do Kwon's guilty plea highlights the seriousness of the crimes associated with the fall of TerraUSD and Luna, as well as ongoing legal troubles that may have long-term implications for his career.
