South Korean entrepreneur Do Kwon, who once triggered a "century crash" in the history of cryptocurrency, may admit to fraud charges in the United States. U.S. Judge Paul Engelmayer has scheduled the hearing for August 13 at the Manhattan Federal Court, where Do Kwon is expected to withdraw his previous not guilty plea. This news has quickly shaken the cryptocurrency community.
Do Kwon is the co-founder of Terraform Labs, based in Singapore, and had launched the algorithmic stablecoin TerraUSD (UST) and its sister coin Luna (LUNC), which were once popular worldwide. In May 2022, UST lost its peg to the dollar, triggering a "death spiral," and the price of Luna plummeted from a high of $119.18 to nearly zero, leaving hundreds of thousands of investors around the world with huge losses, estimated at $40 billion.
Prior to this, the U.S. prosecutors had charged Do Kwon with nine counts including securities fraud, wire fraud, commodities fraud, and money laundering, but he has consistently denied the allegations. In March 2023, he was arrested in Montenegro, facing extradition battles between the United States and South Korea. If this guilty plea materializes, it will mark a critical judicial phase in this globally sensational cryptocurrency fraud case, and could bring new possibilities for compensation for the victims.
As of now, Do Kwon's legal team and the U.S. prosecutor's office have not yet made a public response. The market and investors are closely monitoring the outcome of the hearing, waiting for the next developments in the situation.
