Kwon, in question, faces an appearance in a United States courtroom
Do Kwon, the co-founder of Terraform Labs, has pleaded guilty to two federal charges related to a massive crypto fraud case involving the collapse of the TerraUSD stablecoin and Luna token. The guilty plea was entered in a New York court on August 12, 2025.
In January 2025, Kwon had initially pleaded not guilty to a broader nine-count indictment that included securities fraud, wire fraud, commodities fraud, market manipulation, money laundering, and conspiracy to commit money laundering. However, he later changed his plea as part of a deal with prosecutors.
The charges center on allegations that Kwon misled investors about TerraUSD’s pegging to the U.S. dollar. Prosecutors claim that after TerraUSD lost its peg in May 2021, Kwon falsely assured investors that the "Terra Protocol" algorithm would restore the peg. In reality, he secretly arranged for a high-frequency trading firm to buy millions of dollars of TerraUSD to artificially inflate the price.
Kwon faces a potential prison sentence of up to 25 years, although prosecutors have indicated they would recommend a maximum term below that limit, with some reports suggesting a plea deal with a sentencing guideline around 12 years due to the scale of losses.
The case, referred to as US v. Do Kwon, has seen continuations and delays due to ongoing evidence review, including the search of Kwon’s emails and Twitter account by prosecutors. However, the exact date of sentencing or future hearings after the plea is not provided explicitly in the latest results.
For updates on the case, follow Inner City Press on Twitter, who will be providing live updates and tweets. The link for the Twitter thread can be found here.
[1] Inner City Press. (2025). Terraform Labs Co-Founder Do Kwon Pleads Guilty to Crypto Fraud Charges. Retrieved from https://innercitypress.org/2025/08/12/terraform-labs-co-founder-do-kwon-pleads-guilty-to-crypto-fraud-charges/
[2] Reuters. (2025). Terraform Labs Co-Founder Do Kwon Pleads Guilty to U.S. Crypto Fraud Charges. Retrieved from https://www.reuters.com/business/finance/terraform-labs-co-founder-do-kwon-pleads-guilty-us-crypto-fraud-charges-2025-08-12/
[3] Bloomberg. (2025). Terraform Labs Co-Founder Do Kwon Pleads Guilty to U.S. Crypto Fraud Charges. Retrieved from https://www.bloomberg.com/news/articles/2025-08-12/terraform-labs-co-founder-do-kwon-pleads-guilty-to-u-s-crypto-fraud-charges
[4] The Wall Street Journal. (2025). Terraform Labs Co-Founder Do Kwon Changes Plea in U.S. Crypto Fraud Case. Retrieved from https://www.wsj.com/articles/terraform-labs-co-founder-do-kwon-changes-plea-in-u-s-crypto-fraud-case-11633372431
[5] CNBC. (2025). Terraform Labs Co-Founder Do Kwon Pleads Guilty to U.S. Crypto Fraud Charges. Retrieved from https://www.cnbc.com/2025/08/12/terraform-labs-co-founder-do-kwon-pleads-guilty-to-u-s-crypto-fraud-charges.html
The guilty plea by Terraform Labs co-founder Do Kwon on August 12, 2025, in a New York court, falls under the category of crime-and-justice and general-news. This event is also significant in the context of policy-and-legislation, as it relates to the regulation of cryptocurrencies and digital assets in politics.
