Terra’s Do Kwon to Change ‘Not Guilty’ Plea in US Fraud Case

Terraform Labs founder Do Kwon may change his “not guilty” plea in federal court tomorrow, a judge said Monday.

District Judge Paul Engelmayer, of the Southern District of New York, scheduled a hearing for Tuesday morning in an order saying he had been “advised that the defendant may enter a change of plea.” Kwon previously pleaded “not guilty” to multiple fraud and market manipulation charges tied to the operation and subsequent collapse of Terraform’s Terra/Luna stablecoin ecosystem.

Kwon was extradited to the U.S. at the end of 2024 following a lengthy back-and-forth with different Montenegrin authorities. Kwon was detained in Montenegro following an attempt to travel on a fake passport.

A trial was tentatively set for next January, after prosecutors said they needed to examine six terabytes of data during discovery. Judge Engelmayer’s order on Monday did not specify whether Kwon would plead guilty to all of the charges or if prosecutors had come to a plea deal with the defense team. His order did say the defense attorneys “should, in advance of the proceeding, review with the defendant any plea agreement or Pimentel letter.”

Kwon and Terraform have already been found liable for civil fraud in a case brought by the U.S. Securities and Exchange Commission, and ordered to pay $4.5 billion in penalties and disgorgement.

The Terra network, once worth over $18 billion, collapsed in a matter of days after the algorithmic stablecoin TerraUSD (UST) lost its peg and its companion token Luna (LUNA) lost most of its value.

An attorney for Kwon did not immediately return a request for comment.

Join the crypto policy conversation Sept. 10 in D.C. — Register now for CoinDesk: Policy & Regulation.