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Do Kwon, the former tech executive accused of triggering a $40 billion cryptocurrency crisis, has pleaded guilty in a US district court to two counts of fraud. The South Korean, who headed Singapore-based Terraform Labs, operated TerraUSD and Luna, two cryptocurrencies that collapsed in 2022, sparking a wider market sell-off. US authorities have accused him of "orchestrating a multi-billion dollar crypto asset securities fraud."
As part of the plea deal, prosecutors have agreed to refrain from seeking a sentence longer than 12 years. Kwon is due to be sentenced on 11 December.
Kwon's guilty plea "underscores the importance of accountability in the digital asset sector," said Todd Snyder, who was appointed by US authorities and Terraform Labs to oversee the company's liquidation.
He added that those who contributed to the collapse of Terraform Labs will be held to account by the firm and that assets will be recovered in the best interests of claimants.
Kwon's guilty plea in a New York court comes after a lengthy legal battle.
He initially fled South Korea after a warrant for his arrest was issued in 2023, eventually ending up in Montenegro where he was arrested and jailed before being extradited to the US.
"In 2021, I made false and misleading statements about why TerraUSD regained its peg," he said in court on Tuesday.
"What I did was wrong and I want to apologise for my conduct," he added.
Kwon had originally pleaded not guilty to nine counts stemming from the crash, including securities and wire fraud, and money laundering conspiracy. He had faced up to 135 years in prison if convicted of the charges in the original indictment.
As part of his plea deal, Kwon agreed to refrain from challenging the allegations in the indictment. He must also forfeit up to $19.3m plus interest and several properties and pay restitution.
He still faces charges in South Korea, according to his attorney.
While prosecutors have agreed to limit their requested sentence to 12 years, Judge Paul Engelmayer maintained that he was entitled to prescribe a longer sentence.
