TerraUSD collapse: Crypto mogul Do Kwon, known as 'the cryptocurrency king,' pleads guilty to fraud charges

[Eugene]

Also: Do Kwon Pleads Guilty To Fraud (U.S. Attorney's Office, Southern District of New York)

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Source: Associated Press

Crypto mogul Do Kwon, known as ‘the cryptocurrency king,’ pleads guilty to fraud charges

By LARRY NEUMEISTER
Updated 5:02 PM EDT, August 12, 2025

NEW YORK (AP) — South Korean cryptocurrency mogul Do Kwon pleaded guilty on Tuesday to two fraud charges arising from the $40 billion collapse of a cryptocurrency ecosystem that had promised investors their money was safe.

Kwon, 33, dubbed by some as “the cryptocurrency king,” entered the plea in Manhattan federal court.

According to a plea agreement signed by Kwon and prosecutors, the government said it will not seek a prison term of more than 12 years as long as Kwon complies with the deal’s terms, even though federal sentencing guidelines would have recommended a prison term of about 25 years. Sentencing is set for Dec. 11.

Authorities said investors worldwide lost money in the Singapore crypto firm Terraform Labs’ $40 billion cryptocurrency crash. Kwon co-founded the company in 2018.

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Read more: https://apnews.com/article/do-kwon-terraform-court-montenegro-crypto-mogul-46d924b4d34e90b850889d711c93c802

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Source: U.S. Attorney's Office, Southern District of New York

Do Kwon Pleads Guilty To Fraud

Tuesday, August 12, 2025
For Immediate Release
U.S. Attorney's Office, Southern District of New York

Terraform Labs Co-Founder and CEO Admits to Criminal Schemes That Led to Billions in Investor and User Losses

United States Attorney for the Southern District of New York, Jay Clayton, announced today that DO HYEONG KWON, the co-founder and former chief executive officer of Terraform Labs PTE, Ltd. (“Terraform”), pled guilty to one count of conspiring to commit commodities fraud, securities fraud, and wire fraud; and one count of committing wire fraud in connection with fraudulent schemes at Terraform. KWON touted Terraform as a self-contained and decentralized financial world that leveraged proprietary blockchain technology to offer its own cryptocurrencies, payment system, stock market, and savings bank. In reality and unbeknownst to Terraform investors and users, the core suite of Terraform products did not work as advertised and had been manipulated to create the illusion of a functioning and decentralized financial system. KWON pled guilty today before U.S. District Judge Paul A. Engelmayer.

“Do Kwon used the technological promise and investment euphoria around cryptocurrency to commit one of the largest frauds in history,” said U.S. Attorney Jay Clayton. “Kwon attracted tens of billions in funds to Terraform’s ecosystem by promising a self-stabilizing stablecoin. By the time the markets discovered the ecosystem was unstable, it was too late: the system collapsed, and investors around the world suffered billions in losses. Kwon’s plea represents an important milestone in this Office’s continuing efforts to bring integrity and accountability to the digital asset markets. It would not have been possible without the dedicated work of our law enforcement partners at the FBI and the assistance of our allies abroad.”

According to the allegations contained in the Superseding Indictment and statements made in public filings and in public court proceedings:

Terraform was a blockchain and cryptocurrency company co-founded by KWON in 2018. Terraform distinguished the Terra blockchain from other competing blockchains by issuing so-called algorithmic stablecoins pursuant to what it called the “Terra Protocol.” According to KWON and others, Terraform stablecoins maintained a steady value even under changing market conditions. In or around September 2020, Terraform publicly announced the launch of Terraform’s stablecoin pegged to the U.S. dollar, TerraUSD (“UST”). Terraform promotional materials claimed that, under the Terra Protocol, one UST could always be exchanged for $1 worth of LUNA, the Terra blockchain’s native token. Conversely, $1 worth of LUNA could always be exchanged for one UST.

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Read more: https://www.justice.gov/usao-sdny/pr/do-kwon-pleads-guilty-fraud

[customerserviceguy]

1. It's all fake money

some will just go bust before others do.