By Larry Neumeister
NEW YORK (AP) – South Korean cryptocurrency Mogul Do Kwon pleaded guilty on Tuesday to two fraud fees arising from the $40 billion collapse of the cryptocurrency ecosystem, where investors promised their money was safe.
Kwon, 33, was called “Cryptocurrency King” and entered a plea in Manhattan federal court.
According to a judicial agreement signed by KWON and prosecutors, the government said it would not seek a sentence of more than 12 years, as long as KWON complies with the terms of the transaction, despite the guidelines for federal sentencing recommendations for a sentence of about 25 years. The verdict is set for December 11th.
Authorities said investors around the world lost money in a $40 billion cryptocurrency accident with Singapore’s crypto company Terraform Labs. Kwon co-founded the company in 2018.
The May 2022 collapse came after the company claimed that Terrausd was a reliable “Stablecoin.”
Terrausd was designed as “Stablecoin,” a currency fixed on stable assets such as the dollar to prevent dramatic fluctuations in prices. However, the market value of the Terraus owner and its floating sister currency Luna has been erased by approximately $40 billion.
Kwon was handed over to the US from Montenegro on December 31, after March 23, 2023, and was arrested while traveling with a fake European passport.
As part of his plea for one count of commodity fraud, securities and wire fraud, and one conspiracy of second fraud, Kwon agreed to confiscate more than $19 million. He also loses interest in Terraform and its cryptocurrency.
His lawyer, Sean Hecker, said the plea meant that Kwon accepted the responsibility for making false and misleading statements to investors.
In a statement, the lawyer said his client was “being responsible for misleading the Terra community.”
In a news release, U.S. lawyer Jay Clayton said Kwon “used technical promises and a sense of investment happiness around cryptocurrency to commit one of the biggest scams in history.”
He said investors around the world have lost billions of dollars.
Original issue: August 12, 2025, 6:22pm EDT
