Kwon, the individual, makes a court appearance in the United States
In a significant development, Terraform Labs co-founder and former CEO Do Kwon has pleaded guilty to multiple counts of fraud related to the collapse of the Terra blockchain ecosystem, which resulted in over $40 billion in investor losses.
The case, known as US v. Do Kwon, was presented in a Manhattan federal court on January 2, 2025. The charges involve Do Kwon's misrepresentation of the stablecoin TerraUSD (UST) and the LUNA token, controlling and misusing the Luna Foundation Guard’s cryptocurrency reserves, and deceptive practices on the Mirror Protocol DeFi platform.
Following his guilty plea, Kwon's sentencing is scheduled for December 11, 2025. Under his plea agreement, the government agreed not to seek more than a 12-year prison term if he complies with the plea terms, even though federal guidelines recommend about 25 years.
Authorities have confiscated over $450 million in cryptocurrencies, real estate, and mining equipment linked to Kwon, which will be used to compensate victims through a remission process. Additionally, $577 million was reportedly misappropriated for personal luxury items and paying earlier investors.
Kwon was extradited from Montenegro on December 31, 2024, following his arrest in 2023 while traveling on a false passport. His guilty plea followed a SEC civil fraud case in 2024 that found Terraform Labs and Kwon liable for misleading investors.
The case is a landmark prosecution in the cryptocurrency fraud domain and involved extensive international cooperation. The legal wrangling between local courts and Kwon's defense team in Montenegro dated back to spring 2023. The indictment against Do Kwon includes nine counts.
Updates on the case can be found via Twitter from Inner City Press, who are covering the case. The next hearing in the case is scheduled for January 8, 2025. If found guilty on all charges, Do Kwon could face up to 130 years in prison.
| Aspect | Details | |-------------------|---------| | Charges | Multiple fraud counts: commodities, securities, wire fraud, conspiracy | | Guilty Plea | Entered August 12, 2025, in SDNY federal court | | Sentencing Date | December 11, 2025 | | Potential Sentence | Up to 12 years (plea agreement), though guidelines suggest ~25 years | | Asset Seizure | Over $450 million seized for victim compensation | | Background | Extradited from Montenegro Dec 31, 2024; SEC civil case resolved in 2024 |
[1] Inner City Press [2] CoinDesk [3] Bloomberg [4] SEC Press Release [5] Justice.gov Press Release
Politics surrounding the case of Terraform Labs co-founder Do Kwon, who pleaded guilty to multiple fraud charges related to the collapse of the Terra blockchain ecosystem, are heating up with the approach of his sentencing hearing on December 11, 2025. This high-profile case, known as US v. Do Kwon, is being closely followed in the realm of policy-and-legislation, especially in the general-news and crime-and-justice sectors, as authorities continue to pursue consequences for Kwon's actions that resulted in investor losses amounting to over $40 billion.
