The long-running legal saga of Do Kwon, co-founder of the now-defunct Terraform Labs , has reached a turning point. Kwon reportedly has informed a U.S. court that he will plead guilty to wire fraud and conspiracy to defraud charges levied against him. This comes after years of investigations and trials linked to the collapse of Terra USD, a so-called algorithmic stablecoin. The collapse of the digital token in 2022 wiped out tens of billions of dollars in value and sent shockwaves through the global crypto market. Do Kwon Waives Trial, Faces Up to 25 Years in Prison According to Reuters, the 33-year-old founder told the court he would give up his right to a trial. Reportedly , Kwon admitted to this decision knowing fully well he could face up to 25 years in prison. This confirmation followed a note from the U.S. District Judge Paul Engelmayer indicating that Kwon might change his plea. This legal case started in March 2023 after the U.S. prosecutors filed sweeping charges against Kwon. He was accused of wire fraud, market manipulation, securities fraud, commodities fraud, money laundering and conspiracy to commit fraud. Terra USD Crash Sparks Major Crypto Meltdown These charges came after the sudden crash of Terra USD. Unlike regular stablecoins backed by real money or assets, Terra USD used complicated computer programs and its partner token, Luna, to keep its price steady. At first, the token became hugely successful, attracting billions from investors and making Kwon widely popular in the crypto industry. However, in 2022, Terra’s system failed, and Luna’s value collapsed. This caused a major crisis in the crypto market and led to the downfall of several other crypto companies. Since its major financial crisis, Terraform Labs has been working to pay back investors who were affected by the Terra collapse. In March 2025, the firm launched an online claims portal for affected victims . Terraform co-Founder Extradited to U.S., Found Guilty of Civil Fraud Kwon’s legal troubles spanned multiple countries. In March 2023, he was arrested in Montenegro for using forged travel documents. Both the U.S. and South Korea had issued arrest warrants. After months of proceedings in Montenegro, he was extradited to the U.S. in December 2024. Beyond the criminal case, Kwon and Terraform Labs faced a civil lawsuit filed by the U.S. Securities and Exchange Commission (SEC) in February 2023. The trial began in March without Kwon’s presence. Later in the year, a jury ruled in the agency’s favor , stating that both Terraform and Kwon had misled investors and were guilty of civil fraud. The jury agreed with the SEC’s claims that Kwon and Terraform violated federal securities laws by committing fraud in the buying and selling of Terraform-related securities. The post Terraform’s Do Kwon Set to Plead Guilty in Terraform Fraud Case appeared first on TheCoinrise.com .
