The U.S. criminal case against Terraform Labs co-founder Do Kwon could be entering a decisive phase, with a federal judge in New York scheduling a special hearing for Tuesday that may involve a change of plea.
Court records from the Southern District of New York show Judge Paul Engelmayer instructing Kwon to be ready to deliver a full statement in court, outlining the elements of any offenses to which he intends to plead guilty. The filing also urged his legal team to prepare a written version to streamline the process.
Kwon, extradited from Montenegro late last year after more than a year of legal disputes, has been in U.S. custody without bail since December 2024.
He previously denied nine felony counts — including securities fraud, market manipulation, wire fraud, and money laundering — tied to the 2022 collapse of the Terra blockchain ecosystem, which erased roughly $40 billion from the crypto market.
Authorities had struggled to locate Kwon following the crash until Montenegrin officials detained him for traveling with falsified documents.
U.S. prosecutors allege his actions were central to Terraform’s implosion, while a separate SEC case was resolved in 2024 with a $4.5 billion settlement covering fines, disgorgement, and interest.
It’s unclear what agreement, if any, has been reached between Kwon’s attorneys and federal prosecutors, though court filings confirm months of “productive discussions.” The outcome of Tuesday’s conference could redefine the trajectory of the case, which was originally slated for trial in January 2026.
The development comes shortly after the same court convicted Tornado Cash co-founder Roman Storm of operating an unlicensed money transmitting service, signaling an assertive stance by U.S. authorities in high-profile crypto prosecutions.
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Reporter at Coindoo
Source: https://coindoo.com/do-kwon-may-strike-deal-with-u-s-prosecutors-in-terraform-fraud-case/