Do Kwon, a South Korean cryptocurrency government charged with fraud, stands along with his lawyer David Patton to plead guilty in entrance of U.S. District Judge Paul Engelmayer in New York City, New York, U.S., August 12, 2025 in 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 guilty on Tuesday to two U.S. charges 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 courtroom listening to in New York earlier than U.S. District Judge Paul Engelmayer.
He had pleaded not guilty 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 preserve a worth of $1 — Kwon pleaded guilty to the 2 counts underneath an settlement with the Manhattan U.S. Attorney’s workplace, which introduced the charges.
He faces up to 25 years in jail when Engelmayer sentences him on December 11, although prosecutor Kimberly Ravener mentioned the federal government had agreed to advocate for a jail time period of not more than 12 years offered he accepts duty for his crimes.
Kwon is considered one of a number of cryptocurrency moguls to face federal charges after a stoop in digital token costs in 2022 prompted the collapse of a lot of firms.
Prosecutors alleged that when TerraUSD slipped under its $1 peg in May 2021, he instructed buyers a pc algorithm generally known as “Terra Protocol” had restored the coin’s worth.
Instead, they mentioned, he organized for a high-frequency buying and selling agency to secretly purchase thousands and thousands of {dollars} of the token to artificially prop up its value.
Prosecutors mentioned 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 courtroom, Kwon apologized for his conduct.
“I made false and misleading statements about why it regained its peg by failing to disclose a trading firm’s role in restoring that peg,” Kwon mentioned. “What I did was wrong.”
Kwon agreed in 2024 to pay $80 million as a civil tremendous 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 Exchange Commission.
Kwon has been detained since his extradition from Montenegro late final 12 months.
He additionally faces charges in South Korea. As a part of the deal, prosecutors won’t oppose Kwon’s potential utility to be transferred overseas after serving half his U.S. sentence, Ravener mentioned.