Do Kwon pleads guilty to $40 billion crypto market fraud
South Korean cryptocurrency entrepreneur Do Kwon, the man behind the two digital currencies TerraUSD and Luna, appeared in a New York courtroom on Tuesday, pleading guilty to two U.S. federal charges: conspiracy to commit fraud and wire fraud.
The 33-year-old co-founder of the Singapore-based company Terraform Labs admitted to misleading investors by secretly arranging the purchase of millions of dollars’ worth of tokens for a high-frequency trading firm. Prosecutors claim that when TerraUSD’s price fell below $1 in May 2021, Kwon told investors that a computer algorithm known as the “Terra Protocol” had restored the coin’s value.
False statement and plea deal
This false statement and other misrepresentations encouraged retail and institutional investors to buy Terraform products, boosting the market capitalization of Luna—closely tied to TerraUSD—to $50 billion by spring 2022.
“I made false and misleading statements about the reasons for the peg’s restoration, without disclosing the role of the trading firm in restoring it. I was wrong,” Kwon said in court.
Kwon’s admission was part of his plea agreement with Manhattan prosecutors. He faces up to 25 years in prison for crypto fraud, but under the deal, U.S. authorities agreed to limit his sentence to no more than 12 years if he pleaded guilty voluntarily.
As we wrote, Montenegro сourt rejects Do Kwon appeal and opens door for extradition
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