Terra co-founder Do Kwon pleads guilty to two charges
Why it matters: Kwon is accepting responsibility for a fraud that has driven more losses than almost any other similar crime in history, one that impacted thousands of people around the world.
It closes the books on one of the biggest events in the series of disasters that rocked cryptocurrency markets in 2022.
Kwon faces up to 25 years in prison, according to prosecutors.
In addition to pleading guilty, he agreed to forfeit $19 million and his interest in Terraform Labs and its cryptocurrencies.
Flashback: Kwon was originally indicted with nine counts ranging from fraud to money laundering conspiracy.
A citizen of South Korea, he was arrested in Europe in 2023 while attempting to travel on a fake passport.
Catch up quick: The Terra blockchain supported two main assets with a total value of approximately $50 billion.
That evaporated in May 2022 when the TerraUSD stablecoin, UST, went into a death spiral.
Besides UST, the blockchain supported the LUNA token, a governance token that was also used to counterbalance the value of UST and support its peg.
Terra also launched several other products, most notably a synthetic exchange, called Mirror and a money market called Anchor.
Anchor offered impossibly high interest rates for deposits (typically 19%), which attracted a lot of interest from on chain investors for holding UST.
What they're saying: "Kwon's plea represents an important milestone in this Office's continuing efforts to bring integrity and accountability to the digital asset markets," U.S. Attorney Jay Clayton said in a statement.
Clayton was SEC Chair in the first Trump administration when UST was launched.
The intrigue: The Terra blockchain persists as Terra Classic, as does a fork, or separate blockchain split from the network, that took on the name Terra.
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