Terraform co-founder Do Kwon may plead guilty Tuesday morning in US fraud case

Terraforn Labs co-founder Do Kwon may plead guilty years after U.S. prosecutors charged him with fraud and money laundering.

In a scheduling order filed on Monday in the U.S. District Court for the Southern District of New York, Judge Paul Engelmayer wrote that the "Court has been advised that the defendant may enter a change of plea."

"...  the defendant should be prepared to give a narrative allocution that incorporates all elements of the offense(s) to which the defendant is pleading guilty," the judge said in the order. A conference to discuss the matter is scheduled for Tuesday morning.

Lawyers representing Kwon, who was also CEO of TerraForm, did not immediately respond to a request for comment. Kwon pleaded not guilty in January. 

Kwon was criminally charged in March 2023 with conspiracy to defraud, commodities fraud, wire fraud, securities fraud, conspiracy to defraud, and engaging in market manipulation and money laundering conspiracy. The charges are linked to Kwon's role with algorithmic stablecoin Terra USD (UST), which collapsed dramatically in 2022, wiping out billions of dollars.

Algorithmic stablecoins use market incentives via algorithms to maintain a stable price. Terra was linked to Luna, a governance token, to keep the prices stable.