Terraform Labs co-founder Do Kwon has changed his plea from not guilty to guilty on two counts of wire fraud and conspiracy to defraud.
According to reporting on Tuesday from the US District Court in the Southern District of New York (SDNY), Kwon waived his right to go to trial on two of the nine charges he has been facing from the US government and pleaded guilty. The reported plea agreement with prosecutors would impose $19 million in financial penalties.
The two felony charges could carry up to a 25-year prison sentence if served consecutively, but the agreement reportedly would have prosecutors not recommend more than 12 years. Kwon’s sentencing hearing was scheduled for Dec. 11.
“It will be up to me to decide what a just sentence for you would be,” said Engelmayer on Tuesday, according to Inner City Press.
The Terraform co-founder was indicted in March 2023 for charges including securities fraud, market manipulation, money laundering and wire fraud related to his role at the company. He first appeared in the New York courtroom in January after his extradition from Montenegro, pleading not guilty to all charges and remaining in US custody without bail.
After the 2022 Terra crash, Kwon’s whereabouts were largely unknown until Montenegrin authorities arrested him for using falsified travel documents. He served four months in prison before US and South Korean officials both petitioned Montenegro for extradition, which was complicated by challenges in the country’s lower courts.
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Why would Do Kwon plead guilty now?
It was unclear as of Tuesday why the Terraform co-founder had chosen to change his plea after seven months. According to court filings, US prosecutors had been discussing “pretrial motions and related issues” with Kwon’s lawyers, but had still been expected to go to trial in January 2026.
Crypto-related figures facing criminal charges in SDNY have not always gotten off easy. In 2024, a federal judge sentenced former FTX CEO Sam Bankman-Fried to 25 years in prison. Tornado Cash co-founder Roman Storm was recently found guilty of running an unlicensed money transmitting service and is expected to be sentenced soon, potentially facing a retrial for two charges.
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