Do Kwon sentenced to 15 years over Terra collapse

A Manhattan federal judge sentenced Terraform Labs founder Do Kwon to 15 years in prison on Dec. 11 following his guilty plea in the collapse of the Terra cryptocurrency ecosystem.

The court cited widespread investor harm tied to the failure of TerraUSD and related tokens in 2022. The sentence is among the longest imposed in a U.S. cryptocurrency fraud case.

Prosecutors told the court that Kwon promoted TerraUSD as a stable digital currency designed to maintain its value through automated mechanisms, while privately relying on undisclosed trading activity to sustain the peg. When TerraUSD and its sister token Luna collapsed in May 2022, roughly $40 billion in market value was erased, triggering widespread losses and shaking confidence across the global cryptocurrency sector. Authorities said many investors relied on Kwon’s public assurances that the system could withstand market stress.

Kwon, a South Korean national, was arrested in Montenegro in March 2023 with former Terraform Labs executive Han Chang-joon before his extradition to the U.S. He was transferred to U.S. custody in late 2024 following prolonged legal disputes involving competing extradition requests from American and South Korean authorities. The case has since become a landmark example of U.S. prosecutors pursuing criminal accountability against senior cryptocurrency executives accused of investor deception.