Do Kwon Admits Guilt in High-Profile Crypto Fraud Case

Sat Oct 18 2025 22:05:03 GMT+0300 (Eastern European Summer Time)

Former Terraform Labs CEO pleads guilty in New York, with repercussions for the crypto market.

Do Kwon, the former head of Terraform Labs, has pleaded guilty to two counts of fraud linked to the collapse of the TerraUSD and Luna cryptocurrencies, revealing critical accountability issues in the digital asset sector.

Do Kwon, once a prominent figure in the cryptocurrency realm, entered a New York court on Tuesday dressed in a yellow prison jumpsuit to face serious charges that have profoundly affected the crypto marketplace. The South Korean former tech executive admitted guilt to two criminal fraud counts, which are tied to the significant losses incurred by investors exceeding $40 billion (£31.8 billion) after the decline of the cryptocurrencies he oversaw, TerraUSD and Luna.

As the founder of Singapore-based Terraform Labs, Kwon has been accused of orchestrating a vast securities fraud scheme. The U.S. authorities asserted that he misled investors regarding the reliability of the algorithm designed to keep TerraUSD stable at $1. Instead of the promised technological safeguards, prosecutors allege Kwon covertly arranged for a trading company to buy substantial amounts of the token to artificially maintain its value.

Faced with the fallout of his actions, Kwon's guilty plea signals a pivotal moment for accountability within the digital currency infrastructure, according to Todd Snyder, the appointed overseer of Terraform Labs' liquidation process. Snyder emphasized that all contributors to the company's decline would be held accountable and that efforts to recover assets would prioritize the interests of defrauded investors.

Kwon's legal troubles extended beyond the U.S. after he initially evaded authorities in South Korea, only to be apprehended in Montenegro. Despite his plea, Kwon still faces a sentencing date of December 11, with prosecutors agreeing not to recommend a sentence longer than 12 years. However, Judge Paul Engelmayer has indicated he could impose up to 25 years, and Kwon may still contend with related charges in South Korea.

In a candid acknowledgment, Kwon reflected on his actions, stating, “In 2021, I made false and misleading statements about why [TerraUSD] regained its peg. What I did was wrong, and I want to apologize for my conduct.” Originally facing nine counts that could have led to 135 years in prison, Kwon has now struck a plea deal but must forfeit up to $19.3 million in assets and property, alongside restitution payments.