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A South Korean former tech executive accused of helping to spark a cryptocurrency crisis that cost investors more than $40bn (\u00a331.8bn) has pleaded guilty to two criminal counts of fraud.<\/p>\n
Do Kwon was the boss of Singapore-based Terraform Labs, which operated two cryptocurrencies – TerraUSD and Luna – both of which collapsed in 2022, triggering a wider sell-off in the crypto market.<\/p>\n
The US says he was responsible for the failure of the two digital currencies, accusing him of “orchestrating a multi-billion dollar crypto asset securities fraud”.<\/p>\n
As part of the plea deal, prosecutors have agreed to refrain from seeking a sentence longer than 12 years. Kwon is due to be sentenced on 11 December.<\/p>\n<\/div>\n
Kwon’s guilty plea in a New York court comes after a lengthy legal battle. <\/p>\n
He initially fled South Korea after a warrant for his arrest was issued in 2023<\/a>, eventually ending up in Montenegro where he was arrested<\/a> and jailed<\/a> before being extradited to the US<\/a>.<\/p>\n US prosecutors said Kwon misrepresented features that were supposed to keep the so-called stablecoin at $1 without outside intervention.<\/p>\n They alleged that in 2021, Kwon arranged for a trading firm to surreptitiously purchase millions of dollars worth of the token to restore TerraUSD’s value, even as he told investors that a computer algorithm called Terra Protocol was responsible.<\/p>\n Prosecutors say the alleged misrepresentation prompted a wide array of investors to buy Terraform’s offerings, which helped prop up the value of the company’s Luna token, which was closely linked to TerraUSD.<\/p>\n The following year, Kwon’s TerraUSD and the Luna cryptocurrency crashed.<\/p>\n “In 2021, I made false and misleading statements about why [TerraUSD] regained its peg,” he said in court on Tuesday.<\/p>\n “What I did was wrong and I want to apologise for my conduct,” he added.<\/p>\n Kwon had originally pleaded not guilty to nine counts stemming from the crash, including securities and wire fraud, and money laundering conspiracy.<\/p>\n He had faced up to 135 years in prison if convicted of the charges in the original indictment.<\/p>\n As part of his plea deal, Kwon agreed to refrain from challenging the allegations in the indictment. <\/p>\n He must also forfeit up to $19.3m plus interest and several properties and pay restitution.<\/p>\n While prosecutors have agreed to limit their requested sentence to 12 years, Judge Paul Engelmayer maintained that he was entitled to prescribe a longer sentence.<\/p>\n That sentence could be up to 25 years in prison.<\/p>\n He still faces charges in South Korea, according to his attorney.<\/p>\n<\/div>\n