Terraform Labs CEO Do Kwon is expected to plead guilty in a high-profile U.S. fraud case related to the collapse of the Terra ecosystem.
Details of the Case Against Do Kwon
Court filings confirm that a change-of-plea hearing has been scheduled for Tuesday, August 12, in the Southern District of New York. Kwon initially pleaded not guilty but is now reported to have changed his plea after months of negotiations with prosecutors and his legal team. Allegations against Kwon include a fraudulent scheme related to the LUNA token and the algorithmic stablecoin TerraUSD (UST), which peaked with a market cap over $40 billion in April 2022.
Potential Sentencing Outcomes
If convicted on all charges, Kwon faces up to 61 years in prison. Charges include securities fraud, commodities fraud, wire fraud, and market manipulation. Legal experts indicate that the actual punishment for financial crimes may be lower than statutory maximums, especially when defendants plead guilty or are first-time offenders.
Legal and Market Context
Kwon's anticipated plea change comes less than a week after a jury in the same district convicted Tornado Cash co-founder Roman Storm of running an unlicensed money transmitting business, signaling increased scrutiny from U.S. authorities towards crypto infrastructure and regulation.
The case against Do Kwon highlights the growing legal focus on the cryptocurrency industry following the Terra collapse and other recent market scandals.
