August 13, 2025
By Anjali Kochhar
A dramatic turn may be approaching for Do Kwon, the controversial co-founder of Terraform Labs, as a Manhattan courtroom prepares for a pivotal hearing that could mark a major legal pivot in the saga of cryptocurrency’s most infamous collapse.
In a brief scheduling order dated August 11, 2025, U.S. District Judge Paul Engelmayer revealed that Do Kwon “may enter a change of plea” at a hearing set for Tuesday at 10:30 a.m. EDT in the Southern District of New York. Kwon initially pleaded not guilty in January to nine felony counts, including securities fraud, wire fraud, commodities fraud, money laundering conspiracy, and market manipulation. These charges stem from the disastrous crash of TerraUSD (UST) and Luna, which erased roughly 40 billion dollars in investor value in 2022.
According to court documents, the judge has instructed the defendant to prepare a detailed narrative allocution, explaining how his actions satisfy the legal elements of the charged offenses, to be read in open court. The upcoming hearing may signal not just a guilty plea, but also the possibility of a plea agreement, which could expedite resolution of what has been a protracted and high-profile legal battle.
This development follows Kwon’s long extradition ordeal from his arrest in Montenegro in March 2023 for using fake passports, through legal wrangling between U.S. and South Korean jurisdictions, culminating in his handover to U.S. federal authorities in late 2024.
If Do Kwon does indeed shift to a guilty plea, it would mark a significant moment in crypto regulation history. The case has already seen a civil fraud verdict in 2024, when Terraform Labs and Kwon were found liable in a U.S. Securities and Exchange Commission suit and were ordered to pay billions in penalties. A guilty plea could bolster prosecutorial momentum and set a strong precedent for enforcement actions against algorithmic stablecoin projects and crypto executives.
As Do Kwon stands at this legal crossroads, the outcome of Tuesday’s plea hearing will be watched closely not only for its impact on his fate but also for the precedent it could set for accountability in the cryptocurrency sector. His next move may shape the standards of trust, responsibility, and transparency in the future of digital finance.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over four years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
