Do Kwon Pleads Guilty to Wire Fraud and Conspiracy
In March 2023, Kwon was indicted in the Southern District of New York on nine counts, including securities fraud, market manipulation, money laundering, and wire fraud, all tied to the dramatic collapse of the Terra ecosystem. He initially pleaded not guilty and remained detained without bail following his extradition from Montenegro, which ended a prolonged international legal struggle.
However, just before a scheduled January 2026 trial, Kwon opted to forgo his right to a full trial. Instead, he entered a guilty plea on two of the nine charges.
Plea Deal Details
Under the plea agreement, Kwon will face a combined maximum prison sentence of 25 years if the two counts are served consecutively. Prosecutors, however, have agreed not to recommend more than 12 years in prison.
Financially, Kwon is set to forfeit or pay over $19 million—this includes proceeds from his activities and any remaining stakes he holds in Terraform and its associated crypto assets.
Court Proceedings
On the day of the plea in court, U.S. District Judge Paul Engelmayer stated, “It will be up to me to decide what a just sentence for you would be,” acknowledging the judge’s sole responsibility for the ultimate sentence.
Sentencing is scheduled for December 11, 2025.
This guilty plea marks a significant turning point in Kwon’s legal saga. The Terra ecosystem collapse in 2022 wiped away an estimated $40 billion in value, drawing global attention and triggering widespread legal scrutiny.
Kwon’s admission of guilt undercuts prior public claims that TerraUSD—a so-called algorithmic stablecoin—was securely backed by self-regulating mechanisms. Instead, prosecutors argue he misled investors about its stability while secretly propping up its value.
What Remains Unclear
As of now, there is no public explanation for Kwon’s decision to change his plea after months of preparing for trial. Court filings indicate that pretrial motion discussions had been ongoing between prosecutors and Kwon’s attorneys, but nothing specifically revealed as prompting the shift.
