Do Kwon to Plead Guilty in Fraud Case

Do Kwon, the South Korean crypto entrepreneur associated with two digital currencies that reportedly lost about $40 billion in 2022, is set to plead guilty to charges of conspiracy and wire fraud. This was announced during a court hearing in the U.S.

U.S. District Judge Paul Engelmeyer will likely ask Kwon, who co-founded Terraform Labs in Singapore and created the currencies Terrausd and Luna, to formally enter his plea.

At 33 years old, Kwon had previously pleaded not guilty to nine counts in January. These accusations included securities fraud, wire fraud, merchandise fraud, and conspiracy to commit money laundering.

He faced allegations of misleading investors regarding Terrausd, a so-called stablecoin that aimed to hold a dollar value in 2021. It was claimed that Kwon told investors a computer algorithm called the “Terra Protocol” fixed the coin’s value when it dipped below its peg in May of that year.

Prosecutors from the Manhattan U.S. Attorney’s Office stated that misinformation led investors, both retail and institutional, to inflate Luna’s value significantly.

In 2024, Kwon agreed to pay an $80 million settlement and was banned from cryptocurrency transactions, following a $4.555 billion settlement with the Securities and Exchange Commission.

Since his extradition from Montenegro late last year, Kwon has been in detention. He joins a group of cryptocurrency figures now facing federal charges that arose after a significant drop in digital token prices in 2022 led to numerous business failures.