Do Kwon May Change Plea in U.S. Terra Stablecoin Fraud Case

Judge Paul Engelmayer has scheduled a status conference for August 13, 2025, during which Terraform Labs co-founder Do Kwon may change his plea in a U.S. criminal case tied to the 2022 collapse of the Terra stablecoin ecosystem [7]. The judge indicated in a court order that Kwon “may enter a change of plea,” signaling a potential shift from his initial not guilty plea to a guilty one [7]. If Kwon chooses to plead guilty, he will be required to provide a detailed narrative of the offenses, which will likely be read aloud in open court [7].

Kwon initially pleaded not guilty in January 2025, following his extradition from Montenegro to the United States [6]. He now faces nine felony counts, including conspiracy to defraud, commodities fraud, wire fraud, securities fraud, market manipulation, and money laundering conspiracy [7]. The charges stem from the $40 billion collapse of the Terra stablecoin ecosystem, one of the most significant failures in cryptocurrency history [2].

The potential plea change marks a significant shift in the legal trajectory of the case, which has drawn widespread attention from both the crypto and legal communities. A guilty plea could expedite the judicial process and potentially lead to a reduced sentence, depending on the terms of any deal reached between Kwon and the U.S. Department of Justice. However, it may also indicate a broader trend of legal cooperation within the crypto industry amid heightened regulatory scrutiny [1].

Kwon’s legal team has yet to confirm the specifics of his plea change, but the judge’s directive suggests that the court has already been notified of the possibility [5]. The upcoming conference is seen as a potential turning point in the prosecution of crypto-related crimes in the U.S., setting a precedent for how such cases are handled in the future [4].

The Terraform founder’s legal strategy has evolved over the past several months, reflecting the complexity of the case and the gravity of the charges. If he proceeds with a guilty plea, the narrative he presents in court could have lasting implications for the interpretation of regulatory and criminal liability in the crypto space [3].

The case remains under active judicial oversight, with developments expected in the coming days.

Source:

[1] Brave

(https://bravenewcoin.com/insights/do-kwon-poised-to-change-plea-in-u-s-criminal-case-marking-potential-turning-point-in-crypto-prosecution)

[2] Mitrade

(https://www.mitrade.com/insights/news/live-news/article-3-1030479-20250812)

[3] Times

(https://timesofindia.indiatimes.com/technology/tech-news/terraform-labs-founder-do-kwon-faces-us-charges-in-40-billion-crypto-fraud-report/articleshow/123251781.cms)

[4] Cointelegraph

(https://cointelegraph.com/news/terraform-do-kwon-change-plea-hearing)

[5] The

(https://m.economictimes.com/crypto-news-today-live-12-aug-2025/amp_liveblog/123243763.cms)

[6] TradingView

(https://www.tradingview.com/news/cointelegraph:6b4fca667094b:0-do-kwon-to-change-plea-in-criminal-case-at-wednesday-conference/)

[7] Crypto

(https://cryptobriefing.com/no-trial-terra-luna-do-kwon/)