Do Kwon Pleads Guilty to U.S. Fraud Charges Over Terra Collapse

Do Kwon, the South Korean founder of Terraform Labs, has admitted guilt to two U.S. criminal charges—wire fraud and conspiracy to defraud—marking a dramatic reversal from his earlier denials. The plea, entered in the Southern District of New York, avoids a trial that was slated for 2026 and likely reduces his potential prison sentence.

Prosecutors allege Kwon misled investors about the stability of TerraUSD, a now-defunct stablecoin. His admission in court included an apology for failing to disclose a trading firm's role in artificially propping up the token's value. "What I did was wrong," Kwon told the judge. The case underscores the legal reckoning facing crypto executives after the 2022 market crash.

Under the plea deal, Kwon faces up to 12 years in prison and $19 million in penalties, far below the statutory maximum of 25 years. Sentencing is scheduled for December 2025. The resolution closes one chapter in the ongoing scrutiny of cryptocurrency projects that collapsed amid allegations of misconduct.