Do Kwon May Change Plea in U.S. Criminal Case at Tuesday Hearing
Do Kwon, co-founder of Terraform Labs, is expected to appear in court on Tuesday for a conference in which he “may enter a change of plea” in his ongoing U.S. criminal case.
According to a Monday filing in the U.S. District Court for the Southern District of New York (SDNY), Judge Paul Engelmayer ordered both parties to attend the hearing, signaling that Kwon could be preparing to plead guilty to some or all of the charges against him.
Kwon originally pleaded not guilty in January 2025 to nine felony counts, including securities fraud, market manipulation, money laundering, and wire fraud, after a months-long extradition battle in Montenegro ended with his transfer to the United States.
“The defendant should be prepared to give a narrative allocution that incorporates all elements of the offense(s) to which the defendant is pleading guilty,” Engelmayer wrote, urging counsel to prepare a written statement for efficiency in court.
Charges Tied to Terra’s $40B Collapse
U.S. prosecutors allege that Kwon played a central role in the 2022 collapse of the Terra ecosystem, which erased $40 billion in investor value. Following the crash, Kwon’s whereabouts remained unknown for months until Montenegrin authorities arrested him for using falsified travel documents in March 2023.
After fighting extradition requests from both the U.S. and South Korea for over a year, Kwon was extradited to the United States in December 2024 and has been held without bail for roughly seven months. His trial had been scheduled to begin in January 2026 before news of the possible plea change emerged.
Possible Plea Deal in the Works
While details remain unclear, court records indicate that prosecutors from SDNY, led by interim U.S. Attorney Jay Clayton, have engaged in “productive discussions” with Kwon’s legal team for months, suggesting a potential plea agreement.
The hearing comes less than a week after the same court convicted Tornado Cash co-founder Roman Storm of operating an unlicensed money transmitting business.
Terraform’s SEC Settlement
Separate from the criminal case, Terraform Labs settled a U.S. Securities and Exchange Commission (SEC) lawsuit in 2024, agreeing to pay $4.5 billion in disgorgement, civil penalties, and prejudgment interest.
If Kwon changes his plea on Tuesday, it could mark a major turning point in one of the most high-profile crypto fraud cases in recent history.
