Do Kwon Pleads Guilty to Fraud Over $40 Billion Terra Collapse
Kwon pleaded guilty to conspiracy and wire fraud under an agreement with prosecutors at a hearing in New York on Tuesday. The 33-year-old, dressed in a yellow prison jumpsuit, also agreed to forfeit $19.3 million and some properties as part of the plea deal.
'I knowingly agreed with others to defraud, and did in fact defraud, purchasers of cryptocurrencies issued by my company, Terraform Labs,' Kwon said, reading from a statement. 'What I did was wrong and I want to apologize for my conduct. I take full responsibility.'
Kwon was charged in both South Korea and the US in connection with the implosion of Singapore-based Terraform's TerraUSD, which shook the crypto world in the spring of 2022 and helped trigger the meltdown of cryptocurrency exchange FTX.
The guilty plea averts a trial set for next year before US District Judge Paul Engelmayer.
He was charged in 2023 and was extradited to the US in January, after spending almost two years in Montenegro, where he'd been arrested and convicted of using a phony passport while a fugitive from charges in his native South Korea.
US prosecutors said the longest sentence they will seek under the plea deal is 12 years. The maximum US sentences are five years for the conspiracy count and 20 years for the wire fraud charge.
Sentencing is scheduled for Dec. 11. He had faced nine charges under the indictment.
After he serves half of his sentence, the US will support Kwon spending the remainder of his prison term in South Korea, if he abides by the terms of his plea deal and qualifies under transfer program.
Kwon had been a fugitive from the South Korean charges for months when he and Terraform's former chief financial officer were caught with fake passports in March 2023 trying to board a Dubai-bound private jet at the airport in Montenegro's capital, Podgorica.
Terraform and Kwon, who owned 92% of the company, were found liable for civil fraud in a 2024 suit by the US Securities and Exchange Commission. A jury in New York, at the end of a two-week trial, determined that Kwon and Terraform misled investors — a dismal sign for the former crypto mogul's chances of beating criminal charges.
The jury found that Terraform and Kwon falsely claimed that Chai, a popular Korean payment application, was using Terraform's blockchain technology to make transactions. The jurors also found investors were misled about the stability of the stablecoin, which Kwon and Terraform claimed was algorithmically pegged to the US dollar.
Terraform and Kwon later agreed to pay $4.47 billion and to wind down the firm, in a deal to resolve the case.
The case is US v. Kwon, 23-cr-0151, US District Court, Southern District of New York (Manhattan).
(Adds plea starting in first paragraph, sentence possibility in sixth.)
More stories like this are available on bloomberg.com
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Indian Express
35 minutes ago
- Indian Express
Trump's 50% tariff: Beginning to get foothold in US market, Agra's leather belt takes a hit
US Tariffs Impact on Indians: In a sprawling shoe manufacturing unit in Agra, men in sweat-soaked vests move along the assembly lines in a choreography honed over the years — working in perfect rhythm, their hands following the machine's pace. As each shoe travels down the conveyor belt, it pauses briefly at each station dedicated to a specific task, such as removing wrinkles, cotton brushing, seat lasting, sole heat activation — a display of how a hundred small acts turn the raw leather into products destined for sale in international markets, including the US. However, US President Donald Trump's decision to raise tariffs on Indian goods — hiking duties on leather footwear from 5-8% to 25%, with a further 25% increase threatened by August 27 — has cast a shadow over the unit. India's leather exports across the world rose from $3,681 million in 2020-21 to $4,828 million in 2024-25 — a 31% rise. In the same period, exports to the US rose from $645 million to $1,045 million — a 62% jump. For manufacturers who had only recently begun gaining a foothold in the US market, the move has come as a significant setback. 'There will definitely be an impact. We only have three US-based customers, as most of Agra's exports have traditionally gone to Europe. But the US was a major market we were trying to enter. It's a huge consumer base, and any success there would have changed the scale of our business. This is going to slow that push down,' said Sushant Dhapodkar of Tej International Pvt Ltd. Agra is one of India's largest footwear manufacturing hubs, alongside Kolkata, Kanpur and Chennai. The city has around 10,000 micro-units apart from 150 small-, 30 medium-, and around 15 large-scale industries. Many use leather imported from Turkey, which takes 45–50 days to arrive via road, along with Indian leather sourced mainly from Kanpur and Chennai, and some from Jalandhar. While Europe remains the mainstay for Agra's leather shoe exporters, the US market, the largest consumer base in the world — accounting for 24% of global consumption despite just 4% of the population — has been developing fast. In the last quarter alone, nearly half of Agra's export business, worth about $594 million, went to the US. The growth was so sharp that many manufacturers had invested heavily in expanding production capacity. 'Those who were earlier working on six assembly lines are now running 14,' said Puran Dawar, chairman of the Development Council for Footwear and Leather Industry and president of the Agra Footwear Manufacturers and Exporters Chamber. 'We ourselves had set up a unit bigger than our existing one to tap into the US market. That's definitely out of the question now.' The tariff announcement has also come at the peak of production for autumn and winter collections — the busiest for Agra's export factories. Orders for leather boots, closed-toe shoes, and high-end formal wear are typically placed months in advance by American buyers. These are now in the final stage of production or ready for shipment — but buyers have been calling to put the stock on hold. According to manufacturers, some buyers are ready to look towards China for an alternative. Dawar said: 'This is the peak season for autumn and winter orders, and buyers are already telling us to hold shipments, even for goods ready to go. They want us to share the tariff loss. But the US is a price-sensitive market — nobody can afford to share even 12.5% of the burden, let alone 50%. Some buyers have already cancelled and are looking to China because their tariff is 30%, and to Vietnam, where it's just 20%. We can't compete at those rates.' Nazir Ahmed, owner of Park Exports, said the problem goes far beyond price competition. 'Now with the initial 25%, it's going to be a disaster unless Trump goes back to the original tariff,' he said. 'This won't just be a problem for India, but for the US as well… the higher the duty, the more expensive their product will be. In countries where lower tariffs are imposed, they will have the advantage, and we wouldn't be able to compete with them,' said Ahmed. He also highlighted the potential impact back home. 'If orders aren't placed, factories will be without work. And if factories are without work, workers will be without work. This industry is labour-intensive, so unemployment could run into millions if this continues. And I'm not just talking about manufacturing — textiles, tools, every industry linked to this process will take a hit,' he said. Manufacturers said the setback is particularly bitter because of the efforts they made to break into the US market. 'It's a setback to our plans to double or triple exports to the US,' Ahmed said. 'The government increases targets every year, and the American market has the potential to match our exports to Europe. Now all that planning is on hold.' Others, like Dawar, believe the hike is a 'pressure tactic' and will eventually be rolled back. 'The government is in touch with us to see how they can help. We were called to meet Commerce Minister Piyush Goyal last week to discuss relief. One idea discussed was that the government could bear a part of the hike, and the remaining could be between the manufacturer and the US importer.' The current uncertainty, meanwhile, is already triggering ripple effects beyond Agra. Naseem Khan, a Kanpur tannery owner whose leather is supplied to manufacturers linked to US exports, said clients have begun cancelling or freezing orders. 'Whatever the stage of production, they're saying stop immediately. Even though we don't directly export to the US, we are deeply connected; the leather we produce is approved by those who manufacture finished goods for the US,' Khan said. Meanwhile, exporters are brainstorming alternatives. Russia, once a major market for Agra, is being considered for revival. Others are looking inward to India's growing middle class — a customer base whose purchasing power has risen in recent years. Until now, much of the footwear sold domestically was made locally from scraps and leftovers of the export process. But with international orders in limbo, manufacturers are weighing whether to redirect their best designs and full-scale production to the home turf. Chairman, Council for Leather Export, Rajendra Kumar Jalan said, 'Currently, the dispatches have come to a standstill. All US buyers and Indian manufacturers exporting finished goods to the US have put their orders on pause because of the 50% tax. When the tax was raised to 25%, there was still some hope — we were still on par with competing nations like Bangladesh, Indonesia, Vietnam, and, to some extent, China. But now, we are completely out of the picture. China, in fact, is gaining an advantage because the additional Russian oil tariffs do not apply to them, and they also enjoy a 90-day moratorium.' 'That being said, the US purchases from us are in large volumes, and for these bulk buyers, getting an alternative source of production for these huge orders, and that too in a short period, will be extremely difficult,' said Jalan 'At present, the reaction is one of panic. But we remain hopeful of finding alternative markets. There will be competition from other leather manufacturing nations, but our focus will be on countries where India has signed or is about to sign an FTA — countries such as Chile, Peru, and some European nations,' he said. — With inputs from Nirbhay Thakur
Time of India
an hour ago
- Time of India
Drive against drug peddling loses steam in Coimbatore
Coimbatore: Drive against drug peddling was very active in the city till a year ago. It was then that the city police busted a drug cartel being run by an Ugandan national - Aivan Gabonge – from the Parappana Agrahara Central Prison in Bengaluru with the help of a Kenyan national - Ivy Bonuke, 26. Police were quick to arrest the Kenyan national and seize synthetic drugs. Similarly, a Haryana-based pharmaceutical company owner – Sachin – was arrested by the city police for supplying prescription pills, especially painkillers and sedatives to the local drug peddlers, who were selling the same to college students and IT professionals to get high. Now, the drive against drug peddling has lost steam. The difference is that the city earlier had two special teams exclusively working on curbing the drug menace. Now that the teams are dissolved on the directive of the director general of police, the fight against drug peddling has lost its teeth. "The special teams were closely following the drug trafficking network, busting rackets operating out of different states. After the special teams were dissolved two months ago, many drug rackets have resumed their activities, and drug peddling has been increasing gradually," said a police officer, who didn't want to be named. Pointing out that some IT professionals were in the habit of taking synthetic drugs to stay awake during their night shifts, the officer said, "They gradually get addicted to drugs, spoiling their mental and physical health. Controlling synthetic drug trafficking is the need of the hour. As per the data available with the city police, 281.62 kilograms of ganja, 217.32 grams of methamphetamine and 34,786 painkillers/sedative pills were seized, and 600 drug peddlers were arrested in 285 cases registered under the Narcotic Drugs and Psychotropic Substances Act in 2024. The special teams were instrumental in arresting 169 peddlers and seizing 161kg of ganja and 77 grams of methamphetamine. Another police officer said the drug peddlers were using technology to evade arrest. "Some rackets contact their buyers through Instagram and share the locations where they have hidden drugs. It is not easy to track these locations and arrest the drug peddlers. Therefore, we have started using Instagram under various aliases to keep in contact with the drug peddlers." Yet another police officer said drug peddling had considerably come down in the city. "The special teams were successful in curtailing the main drug supply by arresting the suppliers." He, however, said the law and order police wouldn't be able to focus on drug peddling cases. "Special teams exclusively handling drug trafficking are important, as they could take leads and arrest peddlers from across the country." When contacted, city police commissioner A Saravana Sundar said, "We are taking necessary steps to curtail the drug menace in the city. We have been conducting raids and seizing drugs regularly. This year, so far, we have registered 182 cases and arrested 328 drug peddlers, of who 45 have been detained under the Goondas Act. The seizure of drugs has decreased since we have arrested the main suppliers from other states. We are monitoring couriers and parcel services as well." Stay updated with the latest local news from your city on Times of India (TOI). Check upcoming bank holidays , public holidays , and current gold rates and silver prices in your area.
Time of India
an hour ago
- Time of India
Union Cabinet approves 2 semiconductor projects worth Rs 4,009cr for Odisha
Bhubaneswar: Union Cabinet on Tuesday approved two major semiconductor manufacturing units worth Rs 4,009 crore for Odisha. The two projects, to be set up in Bhubaneswar's Info Valley, will generate thousands of high-skilled jobs, catalyse electronics manufacturing and help place Odisha on the global semiconductor map, sources said. The two manufacturing units will be built by SiCSem and 3D Glass. Given the growing demand for semiconductors in telecom, automotive, data centres, consumer electronics and industrial electronics, the newly approved projects will significantly contribute to creating an ' Atmanirbhar Bharat ', official sources said. Thanking Prime Minister Narendra Modi for the Cabinet's approval, chief minister Mohan Majhi said in an X post, "The recent amendment of the Odisha Semiconductor Manufacturing and Fabless Policy, aimed at enhancing investment viability, competitiveness, and sustainability, together with this significant Cabinet approval, marks a major milestone in the state's industrial and technological advancement. I look forward to continued partnership between the state and central govts to further this strategic initiative for the comprehensive development of Odisha and the nation." SiCSem Pvt Ltd, in collaboration with UK-based Clas-SiC Wafer Fab Ltd, will set up India's first commercial compound semiconductor fabrication facility here. The plant will manufacture silicon carbide (SiC) devices, known for their efficiency in high-power applications, with an annual capacity of 60,000 wafers and 96 million packaged units. The SiC devices will have applications across critical sectors, including missiles, defence equipment, electric vehicles (EVs), railway, fast chargers, data centre racks, consumer appliances and solar power inverters. The facility is expected to give India a strategic edge in producing next-generation power electronics domestically. The second project, by US-headquartered 3D Glass Solutions Inc (3DGS), will introduce the world's most advanced semiconductor packaging technology. The unit will manufacture glass interposers, silicon bridges and 3D heterogeneous integration (3DHI) modules. The component are crucial for miniaturisation, high performance and energy efficiency in electronics. With a planned capacity of about 69,600 glass panel substrates, 50 million assembled units, and 13,200 3DHI modules annually, the facility will cater to applications in defence, high-performance computing, artificial intelligence, RF and automotive electronics, photonics and co-packaged optics. Officials said the two projects will not only bring cutting-edge technology to Odisha but also create a ripple effect in the state's electronics ecosystem, encouraging ancillary industries and boosting technical skill development. Apart from two Odisha projects, the Cabinet also approved one project each for Punjab and Andhra Pradesh under the India Semiconductor Mission (ISM). Union education minister Dharmendra Pradhan hailed the Cabinet's decision to set up the two units in Odisha. He said the decision is a pivotal moment for the state, emphasising its potential to create jobs and generate substantial revenue. Pradhan expressed his gratitude to the PM and highlighted that this move marks a new chapter in the 'Purvodaya' mission. Stay updated with the latest local news from your city on Times of India (TOI). Check upcoming bank holidays , public holidays , and current gold rates and silver prices in your area.
