He accepted that he lied about Terrausd’s algorithm as he orchestrated secret purchases.
This judicial turn reverses its declaration of innocence of January, where it denied all the positions.
The co -founder of Terrafting Labs, Do Kwon, will reverse his initial statement and accept two positions for conspiracy and electronic fraud before a New York court, sealing his destiny after one of the greatest collapses in the history of cryptocurrencies.
The South Korean businessman plans to declare himself guilty this Tuesday, August 12, a federal judge confirmed at a key hearing reported By Reuters.
In January, he faced an accusation of nine positions that included values fraud and money laundering. Now, Kwon, 33, Accept your responsibility in the deception that shook the foundations of the digital asset market.
The Manhattan Prosecutor’s Office accused Kwon of deliberately deceiving investors about the true stability of his Stablecoin Terrausd project, designed to maintain a value of 1 dollar.
In 2021, when the Token lost its parity with the dollar, Kwon publicly said that an algorithm had restored it. However, prosecutors indicated that, in secret, he orchestrated a plan for a high frequency trading firm to massively buy the token, inflating its price in a totally artificial way.
This false narrative promoted the confidence of retail and institutional investors, who injected billions in Terraft products. This, in turn, triggered the value of Luna, Terrausd’s token, until reaching a market capitalization of 50 billion dollars.
The scheme collapsed loudly in the spring of 2022, erasing 40 billion dollars from the market in a matter of days and triggering a wave of bankruptcies throughout the sector.
As Cryptonotics reported at the beginning of the year, the trial of Do Kwon was expected to begin in January 2026. However, the declaration of brand guilt for the beginning of the end for one of the darkest chapters of the cryptocurrency industry, closing a chapter of speculative excesses and opening a new debate about regulation and confidence in decentralized markets.
