Do Kwon to Plead Guilty in $40B Terra Luna Collapse

Terraform Labs co-founder Do Kwon plans to plead guilty to U.S. conspiracy and wire fraud charges tied to the $40 billion collapse of his cryptocurrency projects, a judge confirmed Tuesday.

Do Kwon, co-founder of Terraform Labs, will plead guilty to two criminal charges of conspiracy to defraud and wire fraud related to the 2022 collapse of his terrausd (UST) and luna (LUNA) cryptocurrencies that erased an estimated $40 billion in value, a U.S. judge announced. The South Korean entrepreneur had pleaded not guilty in January to a nine-count indictment alleging securities fraud, wire fraud, commodities fraud, and money laundering conspiracy. Prosecutors accused Kwon of misleading investors by falsely claiming an algorithm maintained UST’s $1 peg after its May 2022 depegging, while secretly arranging millions in token purchases to artificially inflate its price. These alleged misrepresentations helped drive LUNA’s value to $50 billion by spring 2022. Kwon agreed to an $80 million civil fine and crypto transaction ban in a 2024 SEC settlement.