Disgraced Terraform Labs Founder Do Kwon Faces Sentencing in December 2025
Do Kwon, founder of Terraform Labs, known for the Terra/LUNA/UST cryptocurrency products, is scheduled to be sentenced on December 11, 2025, in a Manhattan federal court before Judge Paul Engelmayer. This follows his guilty plea in August to conspiracy charges including commodities fraud, securities fraud, and wire fraud, admitting that he misled investors about the Terra/LUNA/UST offerings.
Kwon was arrested in March 2023 in Montenegro using a forged passport and was extradited to the United States in December 2024, making stops in the UAE and Singapore on his way back. The collapse of Terra/LUNA/UST in 2022 led to losses estimated at up to $40 billion and impacted the wider cryptocurrency ecosystem, including entities such as FTX and Celsius. Unlike other stablecoins such as USDC and USDT, UST was marketed as an algorithmic stablecoin not backed by traditional assets.
Prosecutors have requested a 12-year prison sentence for Kwon, whereas federal sentencing guidelines might suggest a term of approximately 25 years. Kwon's legal team has sought a sentence closer to five years. As part of his plea agreement, Kwon will forfeit about $19.3 million and certain properties. He also submitted a letter to the judge acknowledging responsibility and expressing regret.
Contextual sentencing in the cryptocurrency sector during 2025 reveals variability: Sam Bankman-Fried received 25 years; Shimon Mashinsky was sentenced to 12 years; and Zhao was given a brief prison term in 2024 before being pardoned by President Trump in October 2025.
