Do Kwon, co-founder of Terraform Labs, is preparing to plead guilty to U.S. fraud charges tied to the 2022 collapse of TerraUSD (UST) and LUNA tokens, which erased approximately $40 billion in market value. A plea change conference is scheduled for August 12, 2025, at the Thurgood Marshall Courthouse in New York, where Kwon may formally admit guilt before U.S. District Judge Paul A. Engelmayer.
Kwon faces nine felony charges—including securities fraud, wire fraud, commodities fraud, and conspiracy—stemming from allegations of deceptive practices leading to the stablecoin's implosion. If he pleads guilty, Kwon must deliver a narrative allocution detailing his offenses, as emphasized in court documents.
This development follows Kwon's extradition from Montenegro, where he was detained for over a year after attempting international travel with falsified documents. It also comes after a June 2024 civil settlement where Kwon agreed to pay an $80 million fine to the SEC as part of Terraform Labs' broader $4.55 billion resolution.
The outcome could intensify regulatory scrutiny across crypto markets and impact remaining LUNA and UST stakeholders, though immediate token price effects remain uncertain. Historically, the collapse devastated investor confidence, and a guilty plea may influence future fraud prosecutions in blockchain ecosystems.