New York — Do Kwon, the South Korean tech entrepreneur behind one of the biggest financial disasters in cryptocurrency history, has admitted in U.S. federal court to misleading investors and fueling a multi-billion-dollar collapse.

The 33-year-old, who co-founded Terraform Labs in 2018, entered his plea in Manhattan this week. By accepting a deal with prosecutors, Kwon agreed to a maximum possible prison term of 12 years — a significant reduction from the roughly 25 years he could have faced under normal sentencing guidelines. His formal sentencing is scheduled for December 11.

The Rise and Fall of Terraform Labs

Terraform Labs gained international attention for launching TerraUSD (UST), a “stablecoin” designed to keep its value locked to the U.S. dollar. Marketed as a safe alternative to volatile cryptocurrencies, it attracted billions in investment. But in May 2022, UST lost its peg to the dollar, sending shockwaves through the market.

Its collapse also pulled down its partner token, Luna, erasing around $40 billion in combined value. Investors from Asia to North America faced heavy losses, and calls for criminal action against Kwon intensified.

Capture and Extradition

After the crash, Kwon vanished from public view, sparking an international search. Authorities located him in Montenegro in March 2023, where he was stopped at an airport carrying falsified identification. Following months of legal proceedings, he was extradited to the United States on December 31, 2023.

Guilty Plea and Financial Forfeiture

In court, Kwon admitted to conspiring to commit commodities fraud, securities fraud, and wire fraud, along with a separate charge of wire fraud. As part of the agreement, he will forfeit $19 million in what prosecutors identified as illicit earnings. He will also give up all ownership rights in Terraform Labs and any associated digital currencies.

Statements from Both Sides

Kwon’s attorney, Sean Hecker, said his client accepts full responsibility for his actions and understands the harm caused to the Terra community.

U.S. Attorney Jay Clayton described the case as a stark warning to the industry, emphasizing that hype and innovation in crypto can be exploited to create massive fraud schemes.

Once considered a visionary in blockchain finance, Kwon now stands as a global example of how ambition, unchecked, can lead to one of the most damaging financial failures in digital asset history.