Do Kwon Pleads Guilty to Fraud, Accepts 12-Year Sentence & $19M Fine – Is Justice Served for Terra Investors?
Main Idea
Terraform Labs co-founder Do Kwon has pleaded guilty to two felony counts related to the $40 billion collapse of TerraUSD and Luna, with prosecutors recommending a 12-year prison sentence and a $19 million fine.
Key Points
1. Do Kwon admitted to making false statements about the stability of TerraUSD and its peg mechanism, acknowledging his role in a scheme to defraud investors.
2. The plea deal includes a recommended 12-year prison sentence (below the maximum 25 years) and a $19 million fine, pending no further violations before sentencing on December 11, 2025.
3. The collapse of TerraUSD in May 2022 triggered widespread market turmoil, bankruptcies, and increased regulatory scrutiny globally.
4. Kwon was extradited to the U.S. after being arrested in South Korea in 2023 for traveling with forged documents.
5. The SEC previously won a civil fraud case against Kwon and Terraform Labs in April 2024, with a jury finding they deceived investors regarding Terraform securities.
Description
Terraform Labs co-founder Do Kwon has pleaded guilty to two felony counts of wire fraud and conspiracy to defraud, ending a prolonged legal standoff with U.S. prosecutors. The plea deal, entered Tuesday in the Southern District of New York, marks a sharp reversal from Kwon’s earlier not-guilty stance. Under the reported agreement, prosecutors will recommend a 12-year prison sentence, far below the maximum of 25 years, provided Kwon commits no new crimes before sentencing. He will also face more ...
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