EddieJayonCrypto
11 Aug 25
Terraform Labs co-founder Do Kwon is set to plead guilty on August 12 in a federal cryptocurrency fraud case. He faces charges related to a scheme causing over $40 billion in losses after the collapse of LUNA and TerraUSD tokens in May 2022. The collapse is one of the largest in cryptocurrency histo...
Terraform Labs co-founder Do Kwon is scheduled to plead guilty on August 12 at 10:30 am ET in federal court. This marks a significant shift from his earlier trial defense approach in the high-profile cryptocurrency fraud case. The change comes months before the trial date initially set for January 26, 2026, after Judge Paul Engelmayer encouraged plea discussions between prosecutors and defense attorneys.
Kwon faces federal charges related to orchestrating a cryptocurrency fraud scheme that allegedly caused more than $40 billion in losses following the collapse of LUNA and TerraUSD tokens in May 2022. This collapse stands as one of the largest failures in cryptocurrency history, sparking widespread contagion across the crypto markets. Federal prosecutors have described the Terraform ecosystem as fundamentally deceptive, calling it a “Potemkin village” and claiming the products were inherently unstable, relying on ongoing manipulation to maintain market value and stability.
The guilty plea follows Kwon’s nearly year-long effort to evade prosecution after the Terra collapse. He was apprehended by Montenegrin authorities in March 2023 while attempting to travel with fraudulent passport documentation. After legal challenges to his extradition, Kwon was transferred to U.S. custody, allowing federal prosecutors to advance the fraud charges now set to be resolved with his plea.
This case stands as one of the most significant cryptocurrency fraud prosecutions pursued by federal authorities. With alleged losses totaling around $40 billion, it ranks among the largest financial fraud cases seen in recent years, highlighting the ongoing challenges and risks within the rapidly evolving crypto industry.