Terraform Labs co-founder Do Kwon has pleaded guilty to conspiracy and wire fraud three years after his collapsed cryptocurrency firm wiped out $40 billion in funds, according to a report from Bloomberg. Kwon entered his plea in a New York court on Tuesday as part of a deal reached with prosecutors that reduced his charges.
Federal prosecutors in New York charged Kwon after his firm’s Terra stablecoin and sister token Luna, crashed in 2022, causing some investors to lose all of their savings on a cryptocurrency they thought was supposed to be less volatile than others. Kwon was arrested in Montenegro in 2023 before the country extradited him to the US over a year later.
Inner City Press, which reports on courtroom proceedings, said Kwon admitted to knowingly defrauding cryptocurrency customers and working with another company to artificially inflate Terra’s $1 peg. Kwon’s sentencing is set for December 11th, with the conspiracy charge holding a maximum sentence of five years, and wire fraud at a maximum of 20 years, according to Bloomberg.
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Terraform co-founder Do Kwon pleads guilty over $40 billion crypto collapse