Do Kwon, co-founder of the defunct blockchain firm Terraform Labs, has pleaded guilty to US fraud charges after a tumultuous three years following the company’s collapse.
Do Kwon, who took part in creating and developing the TerraUSD stablecoin and the Luna (now Luna Classic) token lost an estimated $40 billion in value in 2022, entered his plea during a court hearing in New York on Tuesday.
Kwon faced serious allegations stemming from a nine-count indictment that included securities fraud, wire fraud, commodities fraud, and conspiracy to commit money laundering, according to US authorities.
Authorities claim that in reality, Do Kwon had “secretly arranged for” a high-frequency trading firm to buy millions of dollars’ worth of the token to artificially inflate its price and recover its value pegged to the dollar.
As part of his legal troubles, Kwon has agreed to pay an $80 million civil fine and will be banned from engaging in crypto transactions as part of a broader $4.55 billion settlement with the US Securities and Exchange Commission.
Looking ahead, the crypto entrepreneur faces a potential prison sentence of up to 25 years, although prosecutors indicated they would recommend a maximum term of 12 years, contingent on Kwon accepting responsibility for his actions. Sentencing is scheduled for December 11.
Following Do Kwon’s fall, Luna Classic recorded an 8% uptick on the weekly time frame. This recovery reached the $0.00006284 level after months of continuous drops from its yearly high of $0.00012, which was reached in January.
Featured image from DALL-E, chart from TradingView.com
