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Terraform Labs Founder Do Kwon Expected to Plead Guilty in U.S. Fraud Case

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Do Kwon, the South Korean crypto entrepreneur behind Terraform Labs, is expected to plead guilty in a U.S. federal fraud case tied to the 2022 collapse of his digital currencies TerraUSD and Luna, which wiped out an estimated $40 billion in value.

Court records revealed on Monday that U.S. District Judge Paul Engelmayer scheduled a hearing for Tuesday in Manhattan after being advised that Kwon may change his plea. Kwon had previously pleaded not guilty to a nine-count indictment that included charges of securities fraud, wire fraud, commodities fraud, and money laundering conspiracy.

Kwon co-founded Singapore-based Terraform Labs and developed TerraUSD, an algorithmic stablecoin, alongside its sister token Luna. The dramatic failure of the two cryptocurrencies in 2022 triggered widespread investor losses, shook global crypto markets, and sparked heightened regulatory scrutiny of digital assets.

Neither Kwon’s legal team nor the Manhattan U.S. Attorney’s Office have issued statements in response to the latest court developments.

Ripple to Acquire Stablecoin Payments Platform Rail for $200 Million to Expand Market Leadership

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Ripple announced plans to acquire Rail, a Toronto-based stablecoin payments platform, for $200 million in a deal expected to close in Q4 2025 pending regulatory approval. The acquisition aims to enhance Ripple’s stablecoin infrastructure and strengthen its position in cross-border stablecoin payments.

Rail, backed by Galaxy Ventures and Accomplice, facilitates cross-border payments using stablecoins, boasting faster settlement times and lower transaction costs compared to traditional fiat payments. Rail currently processes around 10% of global stablecoin payment volume.

Ripple, closely associated with the XRP token and its own stablecoin RLUSD, highlighted that integrating Rail’s technology will bring virtual accounts and automated back-office operations to its payment solutions. Monica Long, Ripple’s president, emphasized that clearer regulations and market maturity have created ripe conditions for growth in stablecoin payments.

This move follows a recent U.S. law signed by President Donald Trump establishing a federal regulatory framework for stablecoins, potentially accelerating mainstream adoption of digital assets for everyday payments.

Ripple also disclosed an earlier acquisition plan for Hidden Road, a multi-asset prime broker, in a $1.25 billion deal intended to boost RLUSD’s utility.

RLUSD, launched last year, currently has a market cap exceeding $611 million, competing with dominant stablecoins like Tether and Circle’s USDC.

Paxos Trust Settles New York Charges Over Binance-Related Compliance Failures for $48.5 Million

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Paxos Trust agreed to pay $48.5 million to resolve charges brought by New York’s Department of Financial Services (DFS) over its inadequate oversight of illegal activity tied to cryptocurrency exchange Binance. The settlement includes a $26.5 million civil fine and a $22 million commitment to improve Paxos’s compliance program.

The DFS investigation found that Paxos, which partnered with Binance to market and distribute the Binance USD stablecoin, failed to effectively monitor wrongdoing on Binance’s platform. It did not escalate red flags to senior management and had systemic lapses in its anti-money laundering (AML) controls. A review ordered by New York revealed that between July 2017 and November 2022, about $1.6 billion of transactions on Binance’s platform involved illicit actors such as Ponzi schemers and sanctioned darknet marketplace participants. Transactions also involved entities sanctioned by the U.S. Office of Foreign Assets Control.

Following the regulator’s February 2023 order, Paxos ceased issuing Binance’s stablecoin and ended its partnership with the exchange. Paxos stated it had fully addressed the compliance issues, with no harm to customer accounts or consumers.

Binance itself was not a defendant in this New York case but pleaded guilty in November 2023 and agreed to a $4.32 billion criminal penalty for federal anti-money laundering and sanctions violations. Meanwhile, the U.S. Securities and Exchange Commission dropped its civil case against Binance in May 2025, signaling a shift in cryptocurrency regulation during President Donald Trump’s current term.