Do Kwon, the founder of Terraform Labs, has pleaded guilty to two U.S. criminal charges — wire fraud and conspiracy to defraud — in connection with the 2022 collapse of TerraUSD. The plea, entered in the Southern District of New York, spares him a trial on seven other charges, including securities fraud and money laundering.
Under the deal, Kwon will pay $19 million in penalties and face no more than 12 years in prison, compared to the 25-year statutory maximum. Sentencing is scheduled for December 11, 2025.
Prosecutors said Kwon misled investors in 2021 about why TerraUSD regained its $1 peg after a brief devaluation, falsely crediting an algorithm when a high-frequency trading firm had actually bought millions of dollars’ worth of the token.
In court, Kwon admitted wrongdoing and apologized. His case is among several high-profile prosecutions of crypto executives following the 2022 market crash that wiped billions from the sector.
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