Do Kwon May Reverse Plea in U.S. Fraud Case as Hearing Looms

TLDR

• Do Kwon may change his plea to guilty in a New York federal court hearing.
• Judge Paul Engelmayer scheduled the hearing after being advised of a possible plea change.
• Kwon faces multiple fraud and market manipulation charges linked to TerraUSD and Luna.
• His trial was originally set for January next year but the plea change could alter this date.
• Prosecutors were reviewing six terabytes of evidence before the trial was to begin.

Do Kwon could change his plea to guilty in a New York federal court hearing scheduled for Tuesday morning. District Judge Paul Engelmayer stated he had been “advised that the defendant may enter a change of plea.” The development follows months of legal proceedings after his extradition from Montenegro in late 2024.

The court previously set Kwon’s trial for January next year, but this move could significantly alter that timeline. Prosecutors had planned to review six terabytes of evidence before the trial began. The judge’s order did not confirm whether Do Kwon would plead guilty to all charges or accept a plea deal.

Engelmayer instructed that Do Kwon’s defense team must review any plea agreement or Pimentel letter with him before Tuesday’s hearing. An attorney for Kwon has not provided a comment regarding the possible plea change. The U.S. Department of Justice has not yet disclosed any further details about the upcoming proceeding.

Do Kwon Faces Fraud Charges in U.S.

Prosecutors charged Do Kwon with multiple counts of fraud and market manipulation tied to Terraform Labs’ TerraUSD and Luna cryptocurrencies. The charges stem from the sudden collapse of the Terra ecosystem in May 2022. At its peak, the Terra network held a market value exceeding $18 billion.

When TerraUSD lost its peg to the U.S. dollar, Luna also plunged, wiping out massive investor value in days. Kwon initially pleaded not guilty to all criminal counts in the Southern District of New York. His extradition followed detention in Montenegro for attempting to travel on a falsified passport.

Terraform Labs and Do Kwon have already been found liable for civil fraud in a separate SEC case. In that matter, they were ordered to pay $4.5 billion in penalties and disgorgement. This criminal case is expected to be a defining moment in Kwon’s legal battles.