Co-founder of Terraform Labs, Do Kwon, has admitted guilt to criminal charges of fraud and conspiracy, according to Reuters, citing court documents.
During the hearing, Kwon apologized for his actions.
“I made false and misleading statements. I did not disclose the trading firm’s role in restoring the peg. What I did was wrong,” he said.
Kwon also waived his right to a jury trial. According to Inner City Press, he confirmed to the court that he is aware of the potential punishment of 25 years in prison.
Judge: How old are you?
Do Kwon: 33.
Judge: Are you satisfied with your attorneys’ representation of you?
Do Kwon: Yes, Your Honor.
Judge: You know you have the right to go to trial, and you are waiving that right?
Do Kwon: Yes, Your Honor.— Inner City Press (@innercitypress) August 12, 2025
Kwon has reached a plea deal with the Manhattan prosecutor’s office. The prosecution agreed to request a sentence of no more than 12 years, provided he accepts responsibility. Judge Paul Engelmayer noted that he is not bound by the plea agreement and may impose a longer sentence than suggested by the Department of Justice.
The charges against Kwon are related to the collapse of the algorithmic stablecoin TerraUSD (UST) and the native token LUNA in 2022. The ecosystem’s collapse led to investor losses amounting to tens of billions of dollars and triggered a crisis in the crypto market.
The court is set to deliver the sentence on December 11, 2025.
In March 2023, Do Kwon was detained in Montenegro while attempting to leave the country with forged documents. Following lengthy procedures, the Terra founder was extradited to the United States, where charges were brought against him.
Back in 2022, a court in Seoul issued an arrest warrant for Kwon and five others on charges including violations of South Korea’s capital markets law.