Terraform Labs co-founder Do Kwon may enter a change of plea on Tuesday, August 12, 2025. According to a court filing dated August 11, United States District Judge Paul Engelmayer was informed of the plea change, which will significantly change the legal course of the case after months of litigation.
Previously, Kwon pleaded guilty to nine felony counts including securities fraud, wire fraud, money laundering, and commodities fraud among others. Judge Engelmayer ordered the involved parties to appear in a New York court on Tuesday.
“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. In the interest of clarity and efficiency, the Court encourages counsel to assist the defendant in writing an allocation that can be read in open court during the plea proceeding,” Judge Engelmayer noted.
Terraform’s Kwon Fights for Survival
Terraform’s Kwon has suffered heavy losses due to litigation in different jurisdictions in the past few years. Law enforcement has also seized his assets, including crypto assets that he acquired during his tenure at the Terraform project.
A plea bargain would push Kwon to the same fate as FTX founder Sam Bankman-Fried (SBF), who is currently serving a 25-year prison term in the United States.
What’s the Expected Impact on LUNA
Since the collapse of LUNA, from a market valuation of over $30 billion to currently $109 million, the project has struggled to regain market share. The notable legal headwinds in the last few years have caused the LUNA price not to recover from its market crash, despite the gradual crypto rebound.
In the past 24 hours, LUNA price dropped 3 percent, thus continuing with the year-to-date 50 percent downfall. The rising competition in the blockchain space amid low trust for the Terra Luna ecosystem has weighed down on the token’s bullish outlook.