 
 
Do Kwon, mastermind behind the now-defunct Terra project, has changed his plea from not guilty to guilty on two charges in the United States’ case against him.
The Terraform co-founder will plead guilty to wire fraud and conspiracy to defraud, following a years-long criminal case after the collapse of algorithmic stablecoin Terra USD, which wiped out tens of billions of dollars in investor wealth.
Do Kwon Enters Guilty Plea
Do Kwon admitted guilt today on two of the nine charges he has been facing from the US government, according to courthouse reporting from Inner City Press.
The 33-year-old South Korean entrepreneur admitted that he “knowingly engaged in a scheme to defraud and did in fact defraud” purchasers of the TerraUSD stablecoin.
“Between 2018 and 2022 in the Southern District of New York and elsewhere, I knowingly agreed with others to engage in a scheme to defraud, and did in fact defraud, purchasers of the cryptocurrencies issued by my company, Terraform Labs,” Kwon said in a prepared statement.
 
Kwon’s plea with the government slashes his maximum sentence to 25 years, but the reported agreement would have prosecutors recommend no more than 12 years. He will also pay financial penalties of $19 million in the case as part of the plea deal.
The plea marks a dramatic reversal from January, when Kwon pleaded not guilty to a nine-count indictment that included securities fraud, wire fraud, commodities fraud, and money laundering conspiracy.
Kwon’s Extremely Quick Rise And Fall
Kwon created the Terra ecosystem, which had the flagship LUNA token and its sister algorithmic stablecoin TerraUSD (UST) as its main offerings. However, UST lost its peg to the US dollar, and when it imploded, the entire ecosystem crashed spectacularly, leaving a $60 billion black hole in the crypto industry. Terra’s failure also led to a brutal bear market as a number of top crypto projects had exposure to the project.
Kwon had publicly touted UST, even blasting critics who questioned the token’s stability.
“Have fun staying poor,” the fallen crypto mogul told one user on Twitter (now known as X) in 2021.
Kwon’s whereabouts were largely unknown after the 2022 Terra collapse until Montenegro authorities arrested him in March 2023 for attempting to travel to Dubai using falsified documents. He served four months in prison before US and South Korean officials both petitioned Montenegro for extradition, with the former ultimately winning the lengthy extradition tug-of-war.
“In 2021, I made false and misleading statements about why [UST] regained its peg,” Kwon said in the Manhattan federal court today, noting that a trading firm had been involved. “What I did was wrong and I want to apologize for my conduct.”
Kwon’s sentencing hearing is now scheduled for Dec. 11 at 11:00 a.m. in Manhattan.
Source: https://zycrypto.com/terraform-co-founder-do-kwon-pleads-guilty-over-dramatic-60-billion-terra-luna-collapse/