According to court documents obtained on Monday, South Korean crypto innovator Do Kwon, who co-founded Terraform Labs and is accused in connection with the crash of Terra USD and Luna, the two digital assets that allegedly lost about $40 billion in 2022 is now expected to enter a guilty plea.

US District Judge Paul Engelmayer issued a brief scheduling order, stating that he had been advised that the defendant may change his plea. The court hearing is set for Tuesday at 10:30a.m. EDT (1430GMT) in a federal courtroom in Manhattan.

Previously, Kwon had entered a not-guilty plea in response to a nine count indictment, which includes charges of securities fraud, wire fraud, commodities fraud, and a money laundering conspiracy.

Neither lawyers for Kwon nor the Manhattan US Attorney’s office, which brought the charges, immediately responded to requests for comment.

DO KWON SET TO CHANGE PLEA

Defence attorneys are expected to go over the plea deal with Kwon before the hearing and help him prepare a narrative allocution that clearly outlines the offenses he plans to plead guilty to. The court has encouraged the defence counsel to assist in drafting a statement that can be read openly during the proceedings.

Do Kwon’s legal situation intensified after his extradition from Montenegro. He had been held there for over a year following an arrest for attempting to board a flight using forged travel documents. His troubles began with the dramatic failure of his Terra USD and Luna cryptocurrencies, which triggered devastating losses for countless investors.

Federal prosecutors in Manhattan have charged him with a sweeping set of offences which include securities fraud, wire fraud, commodities fraud, and conspiracy.

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With inputs from Reuters