Michaela
Summary: What charges did Do Kwon plead guilty to in the Terraform case?
Do Kwon pleaded guilty to two counts: wire fraud and conspiracy to defraud. The charges relate to misleading investors about the stability of TerraUSD and concealing risks tied to its design and reserves. His plea deal includes a recommended 12-year sentence and over $19 million in penalties.
In a notable turn, Terraform Labs co-founder Do Kwon has amended his plea from not guilty to guilty on two counts, wire fraud and conspiracy to defraud, stemming from the collapse of the Terraform ecosystem.
On Tuesday, Kwon formally entered the guilty plea in the Southern District of New York. According to Inner City Press, under the plea agreement, prosecutors have recommended a 12-year prison term, significantly lower than the 25-year maximum, contingent on Kwon remaining law-abiding until sentencing. He is also expected to face financial penalties exceeding $19 million.
Kwon waived his right to a trial on two of the nine charges brought against him, acknowledging that he fully understands the nature of the charges, the potential penalties, and the implications of his decision.
When questioned by Judge Paul Engelmayer about the basis for his guilty plea, Kwon acknowledged that between 2018 and 2022, he knowingly agreed to “participate in a scheme to defraud purchasers of cryptocurrencies from [the] company.” He admitted to making false statements regarding the restoration of TerraUSD’s peg and the involvement of another firm, conceding that he was aware these statements were untrue.
Kwon’s legal troubles stem from allegations that he orchestrated a scheme to deceive investors, promoting TerraUSD as a stable, reliable asset while concealing critical risks in its design and reserves. U.S. prosecutors claim his actions contributed to one of the most dramatic market crashes in cryptocurrency history.
Terraform Labs’ downfall triggered widespread market turbulence, prompting global regulatory scrutiny and investigations in multiple jurisdictions. Kwon, who was arrested in Montenegro in 2023 for using falsified travel documents, and was the subject of extradition requests from both the United States and South Korea. The case has become one of the most high-profile examples of alleged misconduct in the cryptocurrency sector.
The outcome of the proceedings is expected to shape how authorities handle high-profile cryptocurrency cases in the years ahead, influencing both enforcement strategies and investor protections.
Legal experts suggest it could set new benchmarks for how accountability is pursued in the digital asset space, while also signaling to the industry the standards regulators may demand moving forward.
Legal experts suggest it could set new benchmarks for how accountability is pursued in the digital asset space, while also signaling to the industry the standards regulators may demand moving forward.
Read More
- Do Kwon Trial Set for Jan 2026 as Probe Into Emails, X Account Continues
- Terraform Labs’ Do Kwon Faces New Money Laundering Charge
- Fate of Do Kwon Hangs in Balance as Court Rejects Appeal
Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
