Kwon, a notable figure, makes an appearance in an American courtroom
In a significant development, Do Kwon, co-founder of Terraform Labs, pleaded guilty to conspiracy and wire fraud in a U.S. federal case related to the $40 billion collapse of the TerraUSD stablecoin on August 12, 2025. This plea came after an earlier "not guilty" plea, which he changed at a hearing in New York.
The guilty plea avoids a trial that had been scheduled for 2026 before U.S. District Judge Paul Engelmayer. The next procedural steps will likely move toward sentencing, but no specific date for the sentencing hearing has been publicly announced yet.
The indictment against Do Kwon, released by the Manhattan District Attorney's Office on January 2, 2025, includes nine counts, including conspiracy to commit fraud and money laundering, market manipulation, and securities fraud. According to media reports, Kwon agreed to forfeit $19.3 million and certain properties as part of the plea deal, accepting full responsibility for defrauding buyers of Terraform's cryptocurrencies.
Legal experts indicate Kwon faces very severe sentencing guidelines due to the $40 billion in alleged losses from the fraud, with possible prison time significantly exceeding a decade. However, the plea deal reportedly reduces this risk, with a sentencing recommendation around 12 years, which is considered favorable under the circumstances of such a high-value fraud.
The extradition of Do Kwon from Montenegro to the United States was approved by Montenegro's Minister of Justice Bojan Božović on December 27, 2024, and was completed on December 31. The next hearing in the case against Do Kwon is scheduled for January 8.
This plea and forfeiture agreement marks a major development closing the prosecution phase and moving toward final judgment and sentencing in one of the largest crypto fraud cases to date. The case is U.S. v. Kwon, 23-cr-0151, Southern District of New York.
For updates on this case, follow Inner City Press, who will cover the case and live tweet and thread updates about the proceedings. You can find their Twitter thread at https://t.co/G3vwN2mZuS.
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