Do Kwon Pleads Guilty to Wire Fraud and Conspiracy in TerraUSD Case
Highlights:
- Do Kwon has pled guilty to two counts in his court case after extradition.
- The failure of TerraUSD caused losses and triggered criminal and civil charges.
- Kwon faces sentencing in December after joining other crypto leaders with serious convictions.
Do Kwon has pleaded guilty to two felony counts: wire fraud and conspiracy to defraud. The plea marked a clear change from his earlier not-guilty position. Kwon confessed that he intentionally lied about the stability of TerraUSD. He also admitted to lying to investors regarding the role of another company participating in the project. These misrepresentations led to the failure of the TerraUSD.
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CRYPTO IN THE COURT: Do Kwon Pleads Guilty so 12 Year Sentence to Be Advocated for by US & $19 Million Fine- Inner City Press story https://t.co/4Ir4cbrR97 Extra (what awaits in Seoul) on X for Subscribers https://t.co/D918q4uECv & Substack https://t.co/2vRZC5IpGj
— Inner City Press (@innercitypress) August 12, 2025
In the plea deal, the prosecutors are recommending a jail term of no more than 12 years. This is significantly less than the maximum 25 years granted to the charges. Alongside prison time, Kwon will face financial penalties totaling more than $19 million.
The court set his sentencing hearing for December 11. Judge Paul Engelmayer reminded Kwon that he alone will decide the final sentence. Kwon confirmed he understood the charges and waived his right to a trial before a jury. He accepted responsibility for the criminal acts outlined in the indictment.
Collapse of TerraUSD Sparks Global Legal Fallout
TerraUSD is a stablecoin that is pegged to the US dollar. In addition, its value was supported by its relation to the sister token, Luna. The system, nevertheless, failed and lost its peg. The failure led to investigations by the United States and South Korea and resulted in criminal charges. Regulators claimed that Kwon and Terraform Labs had deceived investors regarding the stability of the stablecoin.
Kwon was arrested in Montenegro, and officials charged him with traveling using forged documents. He was extradited to the United States in December after spending several months in prison. The U.S. Securities and Exchange Commission filed a civil fraud action against Kwon and Terraform Labs. The suit alleged that the firm misled investors concerning the stability of TerraUSD and the Korean payments app, Chai. The jury came to a decision that Kwon and Terraform Labs had committed civil fraud. The company agreed to shut down and repay creditors under a $4.47 billion settlement.
Do Kwon Pleads Guilty and Faces Sentencing in December
The plea deal bars Kwon from appealing any sentence of 25 years or less. Despite the plea, Kwon still faces a nine-count criminal indictment. The remaining charges include securities fraud, market manipulation, and money laundering. The December sentencing hearing will decide on the length of his jail term and monetary fines. Prosecutors will seek an appropriate sentence due to Kwon accepting responsibility and cooperation.
The case has become a subject of great interest because it was one of the most important litigation cases in the history of cryptocurrencies. In addition, the case is among the most high-profile legal battles in crypto history. It follows other major convictions, such as former FTX CEO Sam Bankman-Fried, who received a 25-year sentence.
Roman Storm was recently found guilty on two counts by the jury. The co-founder of Tornado Cash is expected to appeal the guilty verdict later in the year. Meanwhile, his team and the prosecutors have agreed to extend procedural deadlines of the case. The extension might affect any retrial on the two counts.
TORNADO CASH CO-FOUNDER ROMAN STORM FACES POTENTIAL RETRIAL DELAY
A New York jury found Roman Storm guilty on 1 of 3 charges linked to Tornado Cash.
US prosecutors received an extension and may still file for a retrial on remaining counts.
Timing of any new legal action…
— CryptoEdge (@EdGeraldX) August 12, 2025
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Austin Mwendia
Austin Mwendia is a passionate crypto journalist with three years of experience. He has contributed to various media outlets, covering blockchain technology, market analysis, and financial trends. He is committed to educating readers and expanding the adoption of blockchain and decentralized finance.
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