The co-founder of Terraform Labs was indicted in 2023 on nine charges related to the collapse of the ecosystem.
Do Kwon, co-founder of Terraform Labs, has decided to plead guilty to two fraud charges before a U.S. federal court.
The 33-year-old South Korean agreed to plead guilty to wire fraud and conspiracy to commit fraud, according to Reuters. The decision comes after years of legal battles following the collapse of Terra USD, the algorithmic stablecoin that caused around $40 billion in losses.
Kwon also informed the court of his intention to waive his right to a trial, acknowledging that he could face up to 25 years in prison, as confirmed by Inner City Press. According to reports, the agreement provides that prosecutors will recommend a 12-year prison sentence, provided Kwon commits no new crimes before sentencing. He will also face more than $19 million in financial penalties, and sentencing is scheduled for December 11. U.S. District Judge Paul Engelmayer of the Southern District of New York had previously hinted at the possibility of a change in defense strategy.
After months of legal proceedings in Montenegro, Kwon was extradited to the United States last December. Both the United States and South Korea had issued arrest warrants against him. The former CEO was arrested in Montenegro in March 2023 for traveling with falsified documents.
In addition to criminal charges, Kwon has also faced civil proceedings brought by the U.S. Securities and Exchange Commission (SEC) in February 2023. In April, a jury found that both Terraform and Kwon had misled investors, holding them liable for civil fraud.
