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- Do Kwon’s plea change hearing is set for August 12 in New York.
- He faces nine felony charges, including fraud and money laundering.
- Conviction could mean up to 61 years in prison, with plea possibly reducing penalties.
Terraform Labs founder Do Kwon, central to the infamous $40 billion Terra-Luna crypto collapse, may soon reverse his plea and plead guilty in the ongoing U.S. legal case. Facing nine serious felony charges, Kwon’s upcoming court hearing on August 12 in New York could mark a pivotal moment in the saga surrounding one of crypto’s most dramatic failures.
Plea Change Hearing Scheduled for August 12
According to Bloomberg, U.S. District Judge Paul Engelmayer has set a plea change hearing for August 12 in the Southern District of New York. The judge warned Kwon that if he decides to switch to a guilty plea, he must be prepared to fully explain how he broke the law.
Kwon, 33, was extradited from Montenegro earlier this year after a legal battle over jurisdiction, ultimately agreeing to face charges in the United States rather than his native South Korea. Initially, he pleaded not guilty to nine felony counts, including conspiracy to defraud, commodities fraud, wire fraud, securities fraud, market manipulation, and money laundering.
From a $40 Billion Empire to Devastating Collapse
At its peak in 2022, Terra-Luna was among the hottest crypto projects, boasting a $40 billion valuation and backing from major investors like Galaxy Digital. The project’s unique algorithmic stablecoin UST was designed to maintain a $1 peg via an arbitrage mechanism with the Luna governance token. However, the peg collapsed in June 2022, triggering a death spiral that wiped out UST and Luna’s value.
This collapse sent shockwaves throughout the crypto market, causing multiple firms to fail and shaking investor confidence across the industry.
Legal Risks and Potential Sentences for Do Kwon
If convicted on all counts, Kwon could face up to 61 years in prison. U.S. sentencing guidelines allow judges to consider various factors, including the financial loss scale and number of victims, potentially reducing or adjusting sentences.
Each charge carries substantial penalties:
- Conspiracy to Defraud: Up to 5 years
- Commodities Fraud: Up to 7 years
- Wire Fraud: Up to 7 years, or 20 years if involving a financial institution
- Securities Fraud: Up to 7 years
- Market Manipulation: Up to 7 years
- Money Laundering Conspiracy: Up to 7 years
Also Read: Terra (LUNA) Founder Do Kwon’s Personal Data to Be Scrutinized in Legal Battle Over Fraud Allegations
Though sentences can be lighter with cooperation, Kwon’s legal situation remains severe. A guilty plea might be his strategy to mitigate consequences before trial.
Do Kwon’s August 12 hearing could reshape the Terra-Luna legal narrative, potentially ending his fight with a guilty plea after months of denial. The crypto world watches closely as this case continues to unfold, underscoring the risks and regulatory scrutiny facing crypto innovators today.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
