South Korean cryptocurrency mogul Do Kwon has pleaded guilty to fraud in the United States in a case tied to the $40 billion collapse of the TerraUSD and Luna tokens. Kwon, the co-founder of Singapore-based Terraform Labs, entered the plea at the Southern District of New York on Tuesday, according to court filings.
Kwon admitted to one count of conspiring to commit commodities fraud, securities fraud, and wire fraud, and one count of committing wire fraud. As part of his plea, the crypto entrepreneur agreed to forfeit more than $19 million in proceeds from his crimes, according to prosecutors.
Kwon’s guilty plea comes after the spectacular collapse of TerraUSD and Luna, which put a spotlight on the risks and uncertainties of the cryptocurrency market. The collapse of the tokens resulted in billions of dollars in losses for investors, and Kwon’s guilty plea marks a significant development in the case.
US Attorney Jay Clayton said, “Do Kwon used the technological promise and investment euphoria around cryptocurrency to commit one of the largest frauds in history.” Clayton added, “Kwon attracted tens of billions in funds to Terraform’s ecosystem by promising a self-stabilising stablecoin. By the time the markets discovered the ecosystem was unstable, it was too late: the system collapsed, and investors around the world suffered billions in losses.”
Kwon faces a maximum penalty of 25 years in prison and is due to be sentenced on December 11. The crypto entrepreneur was extradited to the US in December 2024, following his arrest in Montenegro after spending months on the run from authorities.
The case highlights the growing scrutiny of the cryptocurrency industry and the need for greater regulation and oversight. As the industry continues to evolve, it is essential for investors to be aware of the risks and uncertainties involved.
The collapse of TerraUSD and Luna had significant implications for the cryptocurrency market, and Kwon’s guilty plea is likely to have further repercussions. The case serves as a reminder of the importance of transparency and accountability in the industry.
The cryptocurrency market has experienced significant growth in recent years, and the case of Do Kwon highlights the need for greater regulation and oversight. As the industry continues to evolve, it is essential for investors to be aware of the risks and uncertainties involved.