|

Do Kwon may flip to guilty plea in case connected to $40 billion UST collapse

  • A court document revealed Do Kwon "may enter a change of plea."
  • Do Kwon pleaded not guilty in January to several charges including market manipulation, securities fraud and wire fraud.
  • Do Kwon spearheaded Terraform's algorithmic stablecoin project UST before it collapsed in May 2022.

Terraform Labs co-founder Do Kwon may be planning a switch to a guilty plea in the Department of Justice's (DOJ) case against him, according to a court schedule order filed by Judge Paul Engelmayer on Monday.

Do Kwon could plead guilty in court to criminal charges

Terraform Labs co-founder Do Kwon could be set to switch to a guilty plea a few months after pleading not guilty, court filing shows.

"The court has been advised that the defendant may enter a change of plea," an order filed by Judge Engelmayer on Monday in the US District Court for the Southern District of New York (SDNY) stated.

Judge Engelmayer ordered that Kwon prepare to deliver a detailed statement in court, addressing each charge he plans to admit and urged his lawyers to prepare it in advance.

"...the defendant should be prepared to give a narrative allocution that incorporates all elements of the offense(s) to which the defendant is pleading guilty."

Kwon is expected to appear in court for a Tuesday conference to air his potential new position.

The Terraform's co-founder pleaded not guilty in January to several charges including conspiracy to defraud, commodities and securities fraud, wire fraud, market manipulation, and conspiracy to commit money laundering.

The charges stem from Kwon’s alleged contribution to the TerraUSD (UST) algorithmic stablecoin collapse in May 2022, which went on to wipe the token's entire market cap of about $40 billion. UST failed following a flaw in its mint-and-burn mechanism with the LUNA token.

Terraform Labs collapsed alongside UST in 2022, a key event that spiralled into the crash of several other crypto platforms including the FTX crypto exchange.

Do Kwon’s location was unknown for months after UST’s collapse before his arrest in Montenegro for attempting to travel using fake documents. He was eventually extradited to the US despite his legal team’s effort to stop the action in Montenegro courts.

Author

Michael Ebiekutan

With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addition to

More from Michael Ebiekutan
Share:

Editor's Picks

Bitcoin Weekly Forecast: BTC retreats as macro headwinds grow
Bitcoin (BTC) remains under pressure, down over 4% this week and trading around $76,900 at the time of writing on Friday. Institutional demand shows signs of weakness as spot BTC Exchange Traded Funds (ETFs) are on track to end their three-week inflow streak, recording nearly $500 million in net outflows through Thursday.
XRP falls toward key support as macro uncertainty, weak momentum cap recovery
Ripple (XRP) falls below $1.33 on Friday, marking the third consecutive day of declines. The token continues to track the broader cryptocurrency market downturn, with investors closely monitoring heightened macroeconomic uncertainty ahead of the United States (US) Consumer Price Index (CPI) release and next week’s Federal Reserve (Fed) monetary policy decision.
Crypto Today: Bitcoin, Ethereum, XRP stabilize at lower levels amid ETF outflows and macroeconomic risks
The broader cryptocurrency market is rising on Friday, with Bitcoin (BTC) trading above $77,000 after testing lower support near $76,500. Ethereum (ETH) shows signs of stability, hovering above the support provided at $2,400 despite capped upside at $2,500. Meanwhile, Ripple (XRP) holds above $1.33 after three straight days of declines, reflecting growing headwinds due to macroeconomic uncertainty.
Bitcoin pulls back as another golden cross fails to deliver
Earlier this week, Bitcoin formed a golden cross, a technical signal that occurs when the price’s 50-day moving average rises above the 200-day moving average and is conventionally viewed as a precursor to a bullish rally. Historically, however, that’s often not been the case.
Bitcoin: BTC retreats as macro headwinds grow
Bitcoin (BTC) remains under pressure, down over 4% this week and trading around $76,900 at the time of writing on Friday. Institutional demand shows signs of weakness as spot BTC Exchange Traded Funds (ETFs) are on track to end their three-week inflow streak, recording nearly $500 million in net outflows through Thursday.