Terraform Founder Do Kwon Pleads Guilty to $40B Fraud in US Court

Do Kwon, founder of Terraform Labs, pleaded guilty to conspiracy and wire fraud charges in connection with the 2022 collapse of the TerraUSD stablecoin, which led to a $40 billion loss and contributed to the FTX exchange meltdown. At a New York court hearing, Kwon admitted to knowingly defrauding purchasers of TerraUSD and making false and misleading statements about how the stablecoin's peg was restored. Under a plea agreement, Kwon agreed to forfeit over $19 million and some properties and face a recommended maximum prison sentence of 12 years, with the possibility of serving the latter half of his sentence in South Korea if he complies with the terms. Previously charged with multiple counts including securities fraud, money laundering, and market manipulation, Kwon had been a fugitive before his arrest in Montenegro for using fake passports and subsequent extradition to the US. His guilty plea waives his right to trial on two of the nine charges, and the US Department of Justice will not oppose an international prisoner transfer after he serves half his sentence. The case has been closely watched as a significant legal reckoning for the cryptocurrency industry following one of its largest collapses.