Do Kwon, a cryptocurrency entrepreneur who designed a pair of digital currencies that failed spectacularly in 2022, triggering a market meltdown, pleaded guilty on Tuesday to two counts of fraud.
At a hearing in federal court in New York, Mr. Kwon pleaded guilty to one count of conspiracy to commit commodities fraud, securities fraud and wire fraud, and one count of committing wire fraud, according to court records. U.S. District Judge Paul A. Engelmayer agreed to the defendant’s plea, according to Nicholas Biase, a court spokesman.
Mr. Kwon agreed to forfeit more than $19 million in proceeds from his crypto dealings, Mr. Biase said.
If the judge decides to enforce the maximum penalty, Mr. Kwon could face 25 years in prison. But as part of the plea agreement, Mr. Biase said, the government would not ask the judge for a sentence of more than 12 years.
Mr. Kwon, 33, who is a citizen of South Korea, also agreed to serve the first half of his sentence in the United States before seeking a transfer to South Korea. Mr. Kwon’s lawyer declined to comment.
The pleas cap a spectacular fall from grace for Mr. Kwon, a trash-talking entrepreneur who created the cryptocurrencies Luna and TerraUSD and ran a crypto company, Terraform Labs. The company raised more than $200 million from investment firms such as Lightspeed Venture Partners. At one point, Luna’s total value ballooned to more than $40 billion.
In social media posts and interviews, Mr. Kwon trumpeted the world-changing potential of Luna, rallying investors and supporters he proudly referred to as “Lunatics.”
But in May 2022, Luna and TerraUSD collapsed, tanking the price of Bitcoin and accelerating the loss of $300 billion in value across the crypto economy. The meltdown caused investors to pull their money out of crypto, eventually ensnaring other crypto firms including FTX, the crypto exchange run by Sam Bankman-Fried.
South Korea issued an arrest warrant for Mr. Kwon and five others on financial charges, while Interpol, the international police organization, issued a “red notice” calling for his arrest. In March 2023, Mr. Kwon was arrested in Montenegro as he prepared to board a flight and charged with fraud by federal prosecutors in New York. He arrived in the United States in December 2024 and had been in custody since then.
The cryptocurrency industry has bounced back, with Bitcoin reaching record highs. President Trump has become a crypto supporter, ending a regulatory crackdown on the industry and signing an executive order to create a national stockpile of Bitcoin.
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