BREAKING: Do Kwon pleads guilty of wire fraud — What’s next for LUNA and LUNC?

Do Kwon, a once-celebrated crypto entrepreneur whose company Terraform Labs collapsed in a $40 billion market fallout, has finally pleaded guilty to wire fraud and conspiracy to defraud in the United States.

Per public information from the US District Court in the Southern District of New York, Kwon waived his right to trial on two of the nine criminal charges he faced and admitted guilt in Tuesday’s hearing. 

Each count carries a statutory maximum sentence of 20 years, with prosecutors indicating that if served consecutively, the combined penalty could reach up to 25 years.

Kwon’s unshakable posture in court has finally bent under pressure. 

For over a year after being flown in from Montenegro, Kwon stood firm on his not-guilty plea to every charge, from securities fraud to market manipulation and money laundering. 

His lawyers geared up for a trial that prosecutors warned could stretch into early 2026, slowed by six terabytes of evidence and several encrypted devices still waiting to be cracked.

Now, court records show that Kwon entered the guilty plea after discussions with prosecutors in recent weeks. Since August, there have been reports that both sides were considering a deal.

While the agreement resolves only two counts in the US criminal case, it leaves other pending charges — including those in South Korea — untouched.

 The plea also does not affect the $4.5 billion civil penalty already imposed by the US Securities and Exchange Commission earlier this year.

Is this end of the multi-year Terra case?

Sentencing has not yet been scheduled, but legal analysts expect the court to set a date in the coming months. Victims of the Terra collapse — potentially more than one million worldwide — will have the opportunity to submit statements under the Justice for All Act of 2004. 

The Department of Justice in the United States has already launched a dedicated victim notification website to manage the unprecedented scale of the case.

Prosecutors are also likely to press for substantial restitution orders, though the complexity of tracing and recovering investor losses across multiple jurisdictions could delay those proceedings. 

Meanwhile, South Korean authorities have said they still intend to pursue their own criminal case once US proceedings conclude.

It is likely Kwon may be looking at more prison time abroad.

Kwon bends under pressure

For months, Kwon framed himself as a bystander to the Terra downfall, not the one who set it in motion.

However, his legal defence lost ground when the prosecutor disclosed they were prepared to present testimony from former Terraform insiders and key financial records linking Kwon directly to deceptive practices that propped up TerraUSD before its crash.

The 2022 collapse of TerraUSD, an algorithmic stablecoin designed to maintain a $1 peg through automated trading with its sister token LUNA, wiped out tens of billions in market value in a matter of days.

The implosion set off a chain reaction in the cryptocurrency sector, which led to the implosion of several hedge funds and exchanges and contributing to one of the steepest downturns in crypto market history.

Regulators in the US, South Korea, Singapore, and several European countries opened investigations as losses spread across borders.

Many retail investors in Asia, Europe, and North America saw their life savings vanish.

The SEC later accused Terraform Labs and Kwon of orchestrating a scheme that misled investors about the stability of TerraUSD and the company’s financial health.

With Tuesday’s plea, the long-running legal battle takes a decisive turn, but for many victims, the question remains whether any recovery of losses is possible, or whether Kwon’s guilty admission will serve only as an acknowledgment of one of crypto’s most devastating failures.

What will happen to LUNA and LUNC?

While the Terra ecosystem has splintered, LUNC — now branded as Terra Luna Classic — runs entirely on community control. 

With Terraform Labs out of the picture after its collapse and bankruptcy, the chain survives through on-chain votes and volunteer developers. 

Burn campaigns chip away at its enormous supply, but without a unifying strategy or heavyweight backers, its future trajectory remains cloudy.

LUNA, the token born from Terra’s 2022 fork into Terra 2.0, has its own identity crisis. It exists on a functioning proof-of-stake network, yet the leadership that once drove its growth is gone. 

Terraform Labs’ demise and Do Kwon’s legal downfall leave it in the hands of scattered contributors, each with ideas but no single vision, a blockchain alive in code, but searching for purpose.

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