Do Kwon Pleads Guilty to Fraud Charges in TerraUSD Collapse Case

Do Kwon, the South Korean entrepreneur behind the notorious TerraUSD and Luna cryptocurrencies, has pleaded guilty to conspiracy to defraud and wire fraud in a New York court on August 12, 2025. This admission comes after the dramatic collapse of the Terra ecosystem in 2022 that wiped out an estimated $40 billion in investor value.

Originally facing nine charges, Kwon opted for a plea deal that reduces his potential prison sentence to a maximum of 12 years if he accepts responsibility, though he could have faced up to 25 years without it. Prosecutors revealed that Kwon misled investors by falsely claiming an algorithm would maintain TerraUSD's $1 peg, while secretly coordinating price manipulation with a trading firm.

Kwon apologized in court, acknowledging the misleading statements that contributed to one of the most significant failures in crypto history. Prior to this, he settled with the US Securities and Exchange Commission (SEC) in 2024 by paying an $80 million civil fine and agreeing to exit the crypto industry.

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Source: Reuters (https://www.reuters.com/legal/government/do-kwon-pleads-guilty-us-fraud-charges-40-billion-crypto-collapse-2025-08-12/?utm_source=openai)