Terraform Labs co-founder Do Kwon pleaded guilty on Tuesday in Manhattan federal court to one count each of conspiracy to defraud and wire fraud stemming from the 2022 collapse of the TerraUSD stablecoin and its sister token Luna, an event that erased about $40 billion in investor value. The 33-year-old South Korean admitted he misled investors about efforts to maintain TerraUSD’s dollar peg and acknowledged working with others to prop up the token’s price. Under a deal with the U.S. attorney’s office, prosecutors agreed to recommend a prison term of no more than 12 years—well below the statutory maximum of 25 years—provided Kwon complies with the agreement. He also accepted a $19 million financial penalty and forfeiture of assets. U.S. District Judge Paul Engelmayer set sentencing for 11 December and noted that Kwon may apply to serve part of his sentence in South Korea after completing at least half of it. Kwon was extradited from Montenegro in December 2024 after months on the run and had previously denied nine criminal counts. His guilty plea caps one of the most high-profile enforcement actions to arise from the crypto market crash of 2022. Terraform and Kwon already faced a separate U.S. Securities and Exchange Commission judgment that imposed civil penalties of about $4.6 billion and barred him from further crypto activity.