Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesStocksEarnInstitutionAI & More
Terraform Labs Cofounder Do Kwon Set to Change Plea in $40 Billion UST Collapse Case

Terraform Labs Cofounder Do Kwon Set to Change Plea in $40 Billion UST Collapse Case

DeFi PlanetDeFi Planet2025/08/12 13:30
By:DeFi Planet

Do Kwon, co-founder of Terraform Labs, is preparing to change his plea in the high-profile U.S. criminal case related to the 2022 collapse of the TerraUSD (UST) stablecoin that wiped out approximately $40 billion in investor value.

Do Kwon, co-founder of Terraform Labs, is preparing to change his plea in the high-profile U.S. criminal case related to the 2022 collapse of the TerraUSD (UST) stablecoin that wiped out approximately $40 billion in investor value.

A federal judge in the Southern District of New York scheduled a hearing for August 12, 2025, where Kwon may formally enter a guilty plea after previously pleading not guilty to nine felony counts, including securities fraud, market manipulation, wire fraud, and money laundering conspiracy.

Terraform Labs Cofounder Do Kwon Set to Change Plea in $40 Billion UST Collapse Case image 0 source: Google

The charges revolve around allegations that Kwon orchestrated a fraudulent scheme involving Terra’s algorithmic stablecoin, UST, and its sister token, Luna. The tokens were designed to maintain UST’s peg to the U.S. dollar through an automated mint-and-burn mechanism. However, in May 2022, this mechanism failed, causing a catastrophic de-pegging and collapse of both tokens, which triggered a ripple effect throughout the cryptocurrency market and led to the bankruptcy of several platforms, including the prominent crypto exchange FTX .

Despite his initial resistance in court and efforts to avoid extradition from Montenegro—where he was arrested after attempting to travel with falsified documents—Kwon was extradited to the U.S. in late 2024 and has been held without bail since his arrival. The upcoming hearing will require Kwon to provide a narrative allocution, outlining the facts of the crimes he intends to admit, signaling a possible agreement with prosecutors in what has been a prolonged legal battle.

This development may represent a critical precedent in how the U.S. legal system prosecutes cryptocurrency founders and executives accused of fraudulent activity. Terraform Labs reached a separate settlement with the U.S. Securities and Exchange Commission (SEC) in 2024, agreeing to pay over $4.5 billion in fines and penalties while winding down its operations to compensate victims.

The case continues to attract significant attention from regulatory authorities and the crypto community alike, as it highlights increasing efforts to enforce accountability in the decentralized finance (DeFi) sector. 

 

0
0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

Understand the market, then trade.
Bitget offers one-stop trading for cryptocurrencies, stocks, and gold.
Trade now!

You may also like

Boosted by AI boom, TSMC (TSM.US) is expected to achieve record profits for the sixth consecutive quarter in Q3, with the options market pricing in nearly 4% earnings volatility ahead of the financial report

The world's largest advanced semiconductor foundry, TSMC, will announce its third-quarter financial report on Thursday.

智通财经•2026/10/15 02:56
Boosted by AI boom, TSMC (TSM.US) is expected to achieve record profits for the sixth consecutive quarter in Q3, with the options market pricing in nearly 4% earnings volatility ahead of the financial report

Anthropic’s performance is “good but not good enough”: under “adjusted profitability,” revenue growth sharply brakes!

Anthropic's third-quarter revenue reached $16.8 billion, an increase of nearly 50% quarter-over-quarter, and achieved "adjusted profitability"—but the market remains unconvinced. The main concern lies in monthly growth slowing sharply from 33% to single digits, leaving a gap of several billion dollars short of the year-end $100 billion target. Token prices have hit historic lows, with the disconnect between volume and price becoming increasingly prominent. Whether this "good but not good enough" performance can support a $2 trillion IPO valuation remains uncertain.

华尔街见闻•2026/10/15 01:36

CoreWeave Drops 15%, AI Computing Power Business Faces Financing Test

CoreWeave bonds have fallen below 80% of face value, with yields surpassing 15% and a default probability exceeding 50% within five years. The company’s CEO attempted to reassure the market by citing an order backlog of over $100 billion, but analysts pointed out that orders do not equate to cash: “If borrowing costs are 9% but project returns are only 5%, the larger the scale, the greater the value destruction.” AI infrastructure-related stocks such as Oracle have also seen significant declines, with concerns spreading across the entire high-yield bond market. Musk sighed: "Oh dear!"

华尔街见闻•2026/10/15 01:32