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.