Do Kwon Can Reach an Agreement with US Prosecutors in the Terraform Fraud Case

Court records from the Southern District of New York show that Judge Paul Engelmayer has ordered Kwon to be ready to present his full testimony in court, outlining the elements of the crime he intends to plead guilty to. The records also require his legal team to prepare a written version to streamline the process. Kwon, extradited from Montenegro at the end of last year after more than a year of legal disputes, has been held in custody by the United States without bail since December 2024. Previously, he had denied nine felony charges - including securities fraud, market manipulation, wire fraud, and money laundering - related to the collapse of the Terra blockchain ecosystem in 2022, which caused the cryptocurrency market to lose about $40 billion. Authorities have struggled to locate Kwon following the incident until officials in Montenegro arrested him for using forged documents. U.S. prosecutors allege that his actions were the main cause of Terraform's collapse, while a separate SEC lawsuit was settled in 2024 for a total settlement amount of $4.5 billion, including fines, restitution, and interest. It is still unclear whether any agreement has been reached between Kwon's lawyer and federal prosecutors, although court records confirm several months of "productive discussions." The outcome of the conference on Tuesday could reshape the direction of the case, which was originally scheduled for trial in January 2026. This development comes right after this court sentenced Roman Storm, the co-founder of Tornado Cash, for operating an unlicensed money transfer service, demonstrating the U.S. government's decisive stance in high-profile cryptocurrency prosecutions.