Do Kwon Expected to Change Not Guilty Plea in Terra Fraud Case

Terraform Labs co-founder Do Kwon is anticipated to alter his 'not guilty' plea during a Tuesday court hearing before U.S. District Judge Paul Engelmayer. The disgraced crypto executive faces nine felony counts including securities fraud, wire fraud, and market manipulation tied to the catastrophic collapse of the Terra ecosystem in May 2022.

The implosion erased $40 billion in investor assets when TerraUSD lost its dollar peg, triggering a death spiral for the once-$18 billion network. Kwon's potential plea change follows his December 2024 extradition from Montenegro, where he was arrested for traveling with falsified documents after months on the run.

This development comes after the SEC secured a $4.5 billion civil judgment against Kwon and Terraform Labs, marking one of the largest penalties in crypto history. The criminal case now unfolding in Manhattan federal court represents the final reckoning for the architect of algorithmic stablecoin's most spectacular failure.