Do Kwon pleads guilty in court! UST founder admits to fraud charges, facing 12 years in prison and a $190 million fine | The largest eyewash in the history of Crypto Assets comes to an end.

Do Kwon, co-founder of Terraform Labs, pleaded guilty on Tuesday in the Southern District of New York federal court to two felony charges of wire fraud and conspiracy to commit fraud, ending a two-year legal standoff with U.S. prosecutors. Under the plea agreement, prosecutors will recommend a sentence of 12 years in prison (with a maximum sentence of 25 years), provided that Kwon does not commit any further crimes before sentencing. He will also face a fine of over $190 million, with the final sentencing hearing scheduled for December 11. The collapse of the UST Algorithmic Stablecoin triggered a $40 billion market capitalization evaporation, making this case one of the most cautionary fraud conviction examples in the Crypto Assets industry.

Court Plea Details: UST Founder Admits to Intentional Fraud Against Investors

• Charge Confirmation: 33-year-old Do Kwon admitted in court that he "intentionally participated in a scheme to defraud investors in Terraform Labs Crypto Assets from 2018 to 2022" and was clearly aware of the false statements regarding the recovery process of the UST stablecoin peg mechanism.
• Sentencing Game: Chief Judge Paul Engelmayer emphasized in court that "the final sentence is determined by this court," rejecting the defense's assumptions regarding the upper limit of the sentence. According to the Inner City Press trial transcript, Kwon has confirmed understanding the charges and the legal consequences of waiving the right to trial.
• Fraud Core: Two felony charges directly target the UST collapse event - this Algorithmic Stablecoin once claimed to maintain a 1 dollar peg through dynamic balancing with LUNA tokens, but the de-pegging collapse in May 2022 directly triggered the Crypto Assets winter and tens of billions in cascading liquidations.

Plea Agreement Terms: The Triple Shackles Behind a 12-Year Sentence

1. Sentence Exchange: The prosecution offers a suggested sentence of no more than 12 years (legal maximum of 25 years) in exchange for Kwon's cooperation in the investigation, provided that he maintains a clean record before sentencing.
2. Financial Penalty: Forced asset confiscation and payment of over $190 million in fines, setting a record for the highest individual fines in Crypto Assets.
3. Appeal Restrictions: The protocol clearly states that Kwon waives his right to appeal a sentence of 25 years or less.

Case Backtrack: The UST Collapse Triggered a Global Regulatory Earthquake

• International Manhunt: After the collapse of UST, the United States and South Korea simultaneously issued arrest warrants. Kwon was arrested in Montenegro in March 2023 for using forged documents, and after a 9-month extradition tug-of-war, he was extradited to the United States in December of the same year.
• Lawsuit Chain: In addition to the current criminal charges, the U.S. SEC had already sued for securities fraud in February 2023, and in April 2024, the jury ruled that Kwon and Terraform Labs must jointly bear $4.7 billion in civil compensation.
• Industry Impact: This case directly led to the bankruptcy of over ten cryptocurrency institutions, including Three Arrows Capital and Voyager Digital, and promoted the global regulatory legislative process for stablecoins.

Sentencing Reference: The Southern District Court of New York's Harsh Sentencing for Cryptocurrency Fraud Becomes Routine

• Strict Precedent: In 2024, FTX founder SBF was sentenced to 25 years in prison, and the money laundering case of Tornado Cash co-founder Roman Storm is pending judgment.
• Prosecutor's Position: Assistant Prosecutor Sarah Ravener emphasized in court that "the systemic damage caused by the UST crash requires corresponding punitive sentencing."
• Judicial inclination: Judge Engelmayer, who previously presided over the case of the founder of BitMEX, is known for imposing strict penalties for violations in the Crypto Assets space.

Conclusion: Milestone in Cryptocurrency Fraud Conviction Do Kwon's guilty plea marks the final chapter of the UST hundred billion collapse case, with the sentencing hearing on December 11 determining the final sentence. This case sets three major precedents: the first criminal conviction of an Algorithmic Stablecoin founder, the highest personal fraud fine, and a model for joint law enforcement between the US and South Korea. As revealed in the trial's core - when Kwon admitted to "knowingly misleading investors", the last veil of the crypto industry's wild era has been torn away. Under the regulatory sword, the next Do Kwon-like "genius scam" may become extinct.