Terraform Labs founder Do Kwon may plead guilty in the U.S. trial related to the collapse of TerraUSD (UST) and LUNA.
In the U.S. District Court for the Southern District of New York, Judge Paul Engelmayer said on Monday that Kwon should be prepared to make a statement covering all elements of the charges at Tuesday morning’s hearing. Kwon’s lawyers declined to comment. Facing multiple charges since March 2023, including conspiracy, securities and commodities fraud, wire fraud, market manipulation, and money laundering, Kwon is considered the main figure behind the 2022 collapse of the Terra ecosystem.
The system, designed to maintain UST’s value through algorithms linked to LUNA, collapsed within days, wiping out billions in investor funds. Terra’s market value, which had exceeded $18 billion at its peak, nearly vanished. Kwon was arrested in Montenegro for attempting to travel with a fake passport and was extradited to the U.S. at the end of 2024.
Recently, Kwon and Terraform Labs were found guilty of fraud in a civil lawsuit filed by the SEC and were ordered to pay a total of $4.5 billion in penalties. The court’s latest remarks have fueled speculation of a possible plea agreement.
