Overview

• After initially pleading not guilty in January, Do Kwon entered a guilty plea on August 12 to two federal counts of conspiracy to defraud and wire fraud in the Southern District of New York.
• He acknowledged making false and misleading statements about TerraUSD’s $1 peg by concealing the involvement of a high-frequency trading firm in propping up its value.
• Prosecutors say the TerraUSD and Luna collapse in May 2022 erased about $40 billion in market value, with an estimated one million investors worldwide impacted.
• Under his plea deal, Kwon forfeited over $19 million in proceeds and faces sentencing on December 11, when prosecutors will recommend a term capped at 12 years in prison.
• The criminal resolution follows a 2024 SEC settlement that imposed an $80 million fine on Kwon and a $4.55 billion judgment against Terraform Labs, leaving him exposed to additional U.S. counts and foreign prosecutions.