Do Kwon Pleads Guilty to Fraud Charges
Do Kwon, the South Korean cryptocurrency executive known for his role in two digital currencies that collectively lost around $40 billion in 2022, pleaded guilty to conspiracy charges related to fraud and wire fraud on August 12, 2025, during a court session in New York.
Kwon, age 33, co-founded Terraform Labs in Singapore and was behind the creation of the Terrausd and Luna currencies. His guilty plea was entered before US District Judge Paul Engelmayer.
Earlier this year, Kwon had pleaded not guilty to nine charges, which included securities fraud and money laundering. He was accused of misleading investors about Terrausd’s stability during 2021, where he gained a reputation for being “Stablecoin-Kwon,” as the coin was intended to maintain a value of $1.
As part of a deal with a Manhattan law firm, Kwon admitted guilt on two counts. Facing a potential sentence of up to 25 years, his plea agreement suggests he may serve no more than 12 years if the government accepts his accountability.
He’s one of several cryptocurrency figures facing federal charges after a downturn in digital token prices in 2022 led to significant business failures.
Prosecutors alleged that when Terrausd’s value dipped below $1 in May 2021, Kwon falsely claimed that a computer algorithm called the “Terra Protocol” could restore its value. In reality, they argue he coordinated secret purchases of tokens to artificially prop up the price with trading firms.
These deceptive claims led to a staggering $500 billion loss by spring 2022, luring both retail and institutional investors into buying Terraform products in hopes of increasing Luna’s worth.
In court, Kwon expressed remorse for his actions. “I issued a false and misleading statement regarding how we regained the peg by failing to disclose the involvement of the trading company,” he acknowledged. “What I did was wrong.”
As part of a broader settlement with the U.S. Securities and Exchange Commission, Kwon agreed to pay $80 million in civil penalties in 2024, and he has been barred from cryptocurrency trading. He has remained in detention since being extradited from Montenegro late last year.
Additionally, he faces charges in South Korea. According to prosecutor Kimberly Ravener, they will not oppose Kwon serving his time overseas after completing his sentence in the U.S.
