Crypto Executive Do Kwon Poised to Plead Guilty in $40 Billion Fraud Case
New York, August 11, 2025 — Do Kwon, the South Korean cryptocurrency entrepreneur and co-founder of Terraform Labs, is expected to enter a guilty plea in the United States to charges related to one of the most high-profile digital currency collapses in recent history. Court records released Monday reveal Kwon may change his plea in connection with allegations of fraud involving the TerraUSD and Luna cryptocurrencies.
The scheduled hearing is set for Tuesday at 10:30 a.m. EDT in federal court in Manhattan before U.S. District Judge Paul Engelmayer. The judge’s brief scheduling order indicated he had been informed of Kwon’s potential plea change, signaling a significant development in the case.
Kwon faces a nine-count indictment that charges him with securities fraud, wire fraud, commodities fraud, and conspiracy to commit money laundering. These charges stem from the dramatic failure of the Terraform Labs’ digital currencies in 2022, which resulted in estimated losses totaling approximately $40 billion. The collapse sent shockwaves through the cryptocurrency market and precipitated extensive regulatory scrutiny.
Previously, Kwon had pleaded not guilty to all charges. The indictment alleges misconduct in the management and promotion of TerraUSD, a stablecoin intended to maintain a guaranteed value, and its sister cryptocurrency Luna. Regulators and prosecutors contend that Kwon engaged in deceptive practices that misled investors and contributed to the catastrophic financial fallout.
Do Kwon, originally from South Korea, established Terraform Labs in Singapore, spearheading the development of TerraUSD and Luna, which at their peak had garnered substantial market attention. Despite his prominence in the crypto space, he has faced legal complications across multiple jurisdictions, including prior detention in Montenegro in 2024 on related charges.
As of Monday evening, neither Kwon’s legal team nor the Manhattan U.S. Attorney’s Office had provided comments regarding the anticipated plea change.
This emerging development marks a critical juncture in the ongoing crackdown on fraudulent activities within the cryptocurrency industry, as regulatory bodies continue to intensify efforts to hold executives accountable for misconduct.
Reporting by Luc Cohen in New York; Editing by Mark Porter and Marguerita Choy