Terraform Labs’ Do Kwon Prepares To Plead Guilty Over $40 Billion Collapse

Do Kwon, co-founder of Terraform Labs, is expected to plead guilty to US fraud charges linked to the collapse of two cryptocurrencies that erased nearly $40 billion in 2022. A plea hearing is scheduled for August 12, 2025, in New York’s Thurgood Marshall Courthouse.

The court documents reveal a pivotal shift in Kwon’s legal strategy, with his defense team preparing a detailed allocution outlining the offenses. Prosecutors allege securities fraud, wire fraud, and commodities violations following his extradition from Montenegro, where he was detained for using falsified travel documents.

The downfall stems from the catastrophic failure of Kwon’s digital assets, which left investors with staggering losses. The case underscores the regulatory risks facing crypto founders as authorities intensify scrutiny of market misconduct.