A Sudden Shift in Court
Do Kwon, the former co-founder of Terraform Labs, has pleaded guilty to two felony charges of wire fraud and conspiracy to defraud, according to filings in the U.S. District Court for the Southern District of New York (SDNY).
Kwon’s move marks a dramatic change from his prior not guilty plea. As part of an agreement with prosecutors, he avoided trial on two of the nine federal charges he faced. The plea deal includes:
- $19 million payment.
- Maximum 12-year sentence — far less than the potential 25 years if terms were served consecutively.
Sentencing is scheduled for December 11 before Judge Paul Engelmayer, who will ultimately determine Kwon’s fate.
On Tuesday, the judge reportedly told Kwon: “It will be up to me to determine what would be a fair sentence for you.”
From Crypto Star to Fugitive
Kwon’s downfall began with the 2022 Terra ecosystem collapse, which erased over $40 billion in value and became one of the largest financial disasters in crypto history.
In March 2023, U.S. prosecutors charged him with multiple offenses including securities fraud. He was later arrested in Montenegro for using forged travel documents in an attempt to evade law enforcement.
After serving four months in a Montenegrin prison, he was extradited to the U.S.
Why the Guilty Plea Now?
The reasoning behind Kwon’s sudden plea shift remains unclear. According to credible media reports, negotiations between prosecutors and his defense team have been ongoing over “pretrial motions and related issues.” His trial had originally been scheduled for January 2026.
Legal analysts note that high-profile crypto defendants in SDNY rarely win at trial. For example:
- In March 2024, Sam Bankman-Fried, founder of FTX, was sentenced to 25 years.
- Roman Storm, co-founder of Tornado Cash, was recently convicted for operating an illegal money-transmitting service and awaits sentencing.
A Watershed Moment in Post-Terra Justice
Do Kwon’s plea marks a pivotal moment in the post-Terra saga — closing years of high-profile legal battles while opening a new chapter on how harshly the courts will punish one of crypto’s most infamous figures.
