Kwon Do-hyung Admits to Wire Fraud and Conspiracy to Defraud Related to Terraform Labs' TerraUSD Collapse in the US

According to Reuters on the 12th (local time), Kwon Do-hyung, the founder of Terraform Labs, is expected to admit to charges of wire fraud and conspiracy to defraud in the United States in connection with the collapse of the algorithmic stablecoin 'TerraUSD.'

According to the outlet, Kwon Do-hyung waived his right to trial and acknowledged in court that he could face up to 25 years in prison.

Previously, Judge Paul Engelmayer of the U.S. District Court for the Southern District of New York stated, "The defendant has been notified that he may change his plea."

In March 2023, Kwon Do-hyung was indicted on multiple charges, including conspiracy to defraud, commodities fraud, wire fraud, securities fraud, market manipulation, and conspiracy to launder money. These charges are related to the collapse of the algorithmic stablecoin 'TerraUSD' and governance token 'Luna (LUNA),' and the incident triggered a ripple effect in the global virtual asset market in 2022.

He was extradited to the United States in December 2024 after several months of legal proceedings in Montenegro. After being arrested in March 2023 for using forged travel documents, both the US and South Korea had issued arrest warrants for him. Kwon Do-hyung claimed innocence in January of this year but has since changed his position.

Meanwhile, Kwon Do-hyung was also named as a defendant in a civil lawsuit filed by the U.S. Securities and Exchange Commission (SEC) in February 2023. The trial between Terraform Labs and the SEC began at the end of March in the absence of Kwon Do-hyung, and last April, a jury found Kwon Do-hyung and Terraform Labs liable for civil fraud for misleading investors.