Do Kwon, a South Korean cryptocurrency government charged with fraud, stands together with his legal professional David Patton to plead responsible in entrance of U.S. District Decide Paul Engelmayer in New York Metropolis, New York, U.S., August 12, 2025 on this courtroom sketch.
Jane Rosenberg | Reuters
Do Kwon, the South Korean cryptocurrency entrepreneur behind two digital currencies that misplaced an estimated $40 billion in 2022, pleaded responsible on Tuesday to 2 U.S. expenses of conspiracy to defraud and wire fraud.
Kwon, 33, who co-founded Singapore-based Terraform Labs and developed the TerraUSD and Luna currencies, entered the plea at a court docket listening to in New York earlier than U.S. District Decide Paul Engelmayer.
He had pleaded not responsible in January to a nine-count indictment charging him with securities fraud, wire fraud, commodities fraud and cash laundering conspiracy.
Accused of deceptive buyers in 2021 about TerraUSD — a so-called stablecoin designed to keep up a price of $1 — Kwon pleaded responsible to the 2 counts underneath an settlement with the Manhattan U.S. Lawyer’s workplace, which introduced the costs.
He faces as much as 25 years in jail when Engelmayer sentences him on December 11, although prosecutor Kimberly Ravener stated the federal government had agreed to advocate for a jail time period of not more than 12 years supplied he accepts accountability for his crimes.
Kwon is one among a number of cryptocurrency moguls to face federal expenses after a hunch in digital token costs in 2022 prompted the collapse of a variety of firms.
Prosecutors alleged that when TerraUSD slipped under its $1 peg in Might 2021, he informed buyers a pc algorithm often known as “Terra Protocol” had restored the coin’s worth.
As a substitute, they stated, he organized for a high-frequency buying and selling agency to secretly purchase tens of millions of {dollars} of the token to artificially prop up its worth.
Prosecutors stated that false declare and others drove retail and institutional buyers to purchase Terraform merchandise and increase the worth of Luna — a extra conventional token that fluctuated in worth however was intently linked to TerraUSD — to $50 billion by the spring of 2022.
In court docket, Kwon apologized for his conduct.
“I made false and deceptive statements about why it regained its peg by failing to reveal a buying and selling agency’s function in restoring that peg,” Kwon stated. “What I did was fallacious.”
Kwon agreed in 2024 to pay $80 million as a civil high quality and be banned from crypto transactions as a part of a $4.55 billion settlement he and Terraform reached with the U.S. Securities and Alternate Fee.
Kwon has been detained since his extradition from Montenegro late final yr.
He additionally faces expenses in South Korea. As a part of the deal, prosecutors is not going to oppose Kwon’s potential utility to be transferred overseas after serving half his U.S. sentence, Ravener stated.