Co-founder of Terraform Labs Do Kwon, who previously pleaded not guilty, is expected to plead guilty at a hearing set for Tuesday. This admission could have significant repercussions for him and the entire crypto industry.
Kwon Prepares to Plead Guilty
Do Kwon is anticipated to admit guilt in a New York court regarding the criminal case tied to the $40 billion collapse of TerraUSD in 2022. U.S. District Judge Paul Engelmayer has scheduled a hearing during which Kwon must detail his law violations if he admits guilt. Initially pleading not guilty at the start of the year, the new court schedule suggests he may change his stance.
Consequences of TerraUSD Collapse
The collapse of the TerraUSD stablecoin in May 2022 resulted in a loss of $40 billion in value, thoroughly shaking the global crypto industry. The mint-and-burn mechanism that linked TerraUSD and its sister coin LUNA failed, causing a significant crash. Thousands of investors suffered losses within days, impacting major financial institutions and leading to the bankruptcy of several companies.
What's Next for Kwon's Case?
Kwon had been in custody in Montenegro after being arrested while trying to flee with a fake passport. Following protracted legal disputes, a recent jury verdict found him guilty of civil fraud in the U.S. If Kwon pleads guilty, it could become one of the highest-profile admissions in crypto scandals.
The situation surrounding Do Kwon and the TerraUSD collapse continues to evolve. A guilty plea could significantly impact the outcome of the criminal case and his future prospects. As the global cryptocurrency market remains unstable, the actions of courts and regulators will be closely monitored.
