Back in 2023, the co-founder of Terraform Labs was indicted on nine counts related to the TerraUSD collapse, which resulted in $40 billion in losses. On August 12, 2025, Do Kwon pleaded guilty to two counts of fraud by electronic means and conspiracy to commit fraud. These charges could cost him up to 25 years in prison if they are run consecutively. He is scheduled to be sentenced on December 11.
Kwon first appeared in a New York courtroom in January this year after being extradited from Montenegro. He refused to plead guilty to all charges and remains in US custody without bail.
After the collapse of Terraform Labs in 2022, Kwon’s whereabouts were unknown until Montenegrin law enforcement arrested him for using fake documents. Kwon served four months in prison before being, officials of the United States and South Korea filed petitions for extradition to Montenegro.
In May 2022, the algorithmic stability TerraUSD coin (UST) lost its peg to $1which caused panic in the market. This was followed by the collapse of FTX and Alameda, which led to a terrible and long cryptowinter.
Source: Reuters
Spelling error report
The following text will be sent to our editors: