Terraform Labs co-founder Do Kwon pleaded guilty on Tuesday in Manhattan federal court to one count of conspiracy to defraud and one count of wire fraud, admitting he misled investors ahead of the 2022 collapse of his TerraUSD stablecoin and its sister token Luna. The implosion erased roughly $40 billion in market value and sent shockwaves across the cryptocurrency sector. Under a plea agreement accepted by U.S. District Judge Paul Engelmayer, prosecutors will recommend a prison term of no more than 12 years—well below the 25-year statutory maximum—provided Kwon does not commit further crimes before sentencing. He agreed to forfeit about $19 million and faces restitution obligations; sentencing is scheduled for Dec. 11. Prosecutors say Kwon falsely claimed in May 2021 that an algorithm had restored TerraUSD’s $1 peg when, in fact, a trading firm secretly purchased tokens to prop up the price. The maneuver, they allege, spurred fresh investment into Terra-linked assets, inflating their combined value to about $50 billion before both coins collapsed the following spring. Kwon, 33, was extradited from Montenegro to the United States on Dec. 31 last year after months on the run. He settled related civil charges with the U.S. Securities and Exchange Commission in 2024 for $80 million and a trading ban, and he still faces a parallel criminal case in South Korea. The plea positions him among a growing list of crypto executives held personally liable for industry-wide failures during the 2022 market downturn.