Do Kwon Pleads Guilty to Fraud Charges

Do Kwon, the co-founder of Terraform, has plead guilty to wire fraud and conspiracy to defraud, following a prolonged legal battle after the collapse of the algorithmic stablecoin Terra USD, which resulted in losses of tens of billions of dollars. At 33 years old, Kwon has waived his right to a trial and acknowledged the possibility of facing up to 25 years in prison, per reports from Inner City Press. Recently, Judge Paul Engelmayer of the U.S. District Court for the Southern District of New York indicated that Kwon might be changing his plea. Kwon was charged in March 2023 with multiple fraud offenses, including conspiracy to commit fraud and market manipulation, all tied to the downfall of Terra USD. This stablecoin relied on algorithms to maintain its value and was connected to a governance token called Luna. The collapse of Terra USD triggered a widespread crisis for various crypto entities in 2022. After months of legal processes in Montenegro, Kwon was extradited to the U.S. in December. He was previously arrested in Montenegro earlier that year for using fake travel documents, having legal warrants issued for his arrest by both the U.S. and South Korea. Initially, Kwon pleaded not guilty to U.S. charges in January 2023. In February, the U.S. Securities and Exchange Commission also brought civil charges against him. The trial concerning Terraform began in late March 2023, although Kwon was not present. In April, a jury found both Terraform and Kwon liable for civil fraud, ruling against them for deceiving investors in violation of federal securities laws.