The Terraform Labs founder might change his plea after months of detention in the United States.
A federal judge scheduled a conference on August 12 during which Do Kwon, co-founder of Terraform Labs, “may enter a plea change” regarding the criminal charges against him.
Judge Paul Engelmayer of the United States District Court for the Southern District of New York issued an order on August 11, requiring the parties to appear in court the following day. This summons suggests that Do Kwon and his legal team have reached an agreement with U.S. federal authorities. According to court documents, the district attorney’s office team, led by acting prosecutor Jay Clayton, has engaged in “productive discussions” with the defendant’s lawyers for several months.
Initially, last January, Do Kwon pleaded not guilty to nine criminal counts, including securities fraud, market manipulation, money laundering, and wire fraud. This followed a lengthy legal battle over his extradition from Montenegro, which ended with his transfer to the United States.
Do Kwon’s indictment dates back to March 2023, when U.S. authorities accused him of contributing to the collapse of the Terra ecosystem, causing losses of around $40 billion to investors. The 2022 collapse forced the entrepreneur into hiding for months until his arrest in Montenegro for using forged travel documents.
The extradition battle lasted over a year, with competing requests from the United States and South Korea. Ultimately, in December 2024, Do Kwon was handed over to U.S. authorities and has been held without bail since January.
Judge Engelmayer specified that “the defendant should be prepared to provide a narrative statement incorporating all elements of the offense or offenses to which he pleads guilty,” indicating that a plea agreement is indeed being negotiated.
Separately, Terraform Labs reached a settlement with the U.S. Securities and Exchange Commission in 2024, agreeing to pay approximately $4.5 billion in fines, civil penalties, and pre-judgment interest.
