Terraform Labs co-founder Do Kwon has admitted in court that he knowingly participated in a scheme to defraud cryptocurrency investors, reversing his previous denials after the collapse of the Terra ecosystem.
From Mocking Victims to Admitting Guilt
For months after the crash that wiped out billions, Kwon used Twitter to mock victims, post jokes, and flaunt his wealth.
But in court, his tone changed. “I knowingly agreed with others in a scheme to defraud and did defraud investors,” he told the judge.
The guilty plea came after U.S. District Judge Paul Engelmayer, in a brief scheduling order, said he had been advised that Kwon might change his plea and set a hearing for Tuesday at 10:30 a.m. EDT (1430 GMT) in Manhattan federal court.
Plea Deal and Sentencing
Kwon confirmed that he signed a plea agreement, which includes more than $19 million in financial penalties and a stipulated sentencing guideline of 25 years. Under the deal, he cannot appeal any sentence of 25 years or less. If he accepts responsibility and avoids new crimes before sentencing, prosecutors will recommend no more than 12 years in prison.
He also agreed not to contest the indictment’s factual allegations and to forfeit assets linked to the case. The fraud, he admitted, took place between 2018 and 2022 in the Southern District of New York, targeting buyers of Terraform Labs’ cryptocurrencies, including some in New York.
When asked by the judge if he knew his actions were illegal, Kwon said that while he didn’t fully understand international statutes, he knew it was wrong. Sentencing is scheduled for December 11 at 11 a.m.
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