The plea was entered on Tuesday in the Southern District of New York before Judge Paul Engelmayer, ending months of preparations for a trial that had been expected in 2026. According to prosecutors, the agreement could mean a shorter sentence than the maximum allowed. According to Reuters report, Kwon had been facing nine charges from U.S. authorities, including securities fraud and money laundering. By pleading guilty to two, he avoided going to trial on the rest.
Prosecutors and Kwon’s lawyers reached a deal that includes $19 million in financial penalties. If the judge followed the statutory maximum, Kwon could face up to 25 years in prison, but under the agreement, prosecutors will not push for more than 12 years. Sentencing is set for December 11, 2025. In court, Kwon apologized. “I made false and misleading statements about why it regained its peg by failing to disclose a trading firm’s role in restoring that peg,” he told the judge. “What I did was wrong.” His case is one of several high-profile prosecutions of cryptocy figures after a major market slump in 2022.
Prosecutors said Kwon misled investors in 2021 about why TerraUSD, a stablecoin he helped create, regained its $1 value after briefly falling. They said he claimed an algorithm called “Terra Protocol” fixed the price, but in truth, a high-frequency trading firm secretly bought millions of dollars’ worth of the token to boost its value. These actions, prosecutors alleged, encouraged more people to invest, driving the price of Luna, another token tied to TerraUSD to $50 billion in value by early 2022.
After the Terra crash, which erased about $40 billion in value, Kwon’s location remained unknown for months. Montenegrin authorities eventually arrested him for traveling with falsified documents. He served four months in prison there while both the U.S. and South Korea sought extradition. He was brought to the U.S. in January 2025 and remained in custody without bail.
In 2024, Kwon and Terraform Labs reached a $4.55 billion settlement with the U.S. Securities and Exchange Commission. As part of that deal, Kwon agreed to an $80 million civil fine and a ban from crypto-related transactions. Meanwhile, he still faces criminal charges in South Korea. Prosecutors in New York said they will not oppose his request to serve part of his sentence there after completing half of it in the U.S.
Cypherpunk Technologies is expanding its massive bet on Zcash by launching what it calls the…
MapleStory Universe is putting artificial intelligence in the hands of game creators with the launch…
Kalshi is making another major move beyond prediction markets, filing with the Commodity Futures Trading…
Coinbase is bringing high-leverage decentralized derivatives directly into its Base App through an integration with…
Hong Kong's first regulated Hong Kong dollar stablecoin is moving beyond testing and into real-world…
Cybersecurity researchers at Rapid7 have uncovered a sophisticated crypto fraud operation that used nearly 885,000…