Do Kwon Sentenced to 15 Years in Prison Over Terra/LUNA/UST Collapse
Terraform Labs co-founder Do Kwon was sentenced to 15 years in a U.S. federal prison in Manhattan for his role in the Terra/LUNA/UST collapse that erased about $40 billion in value in 2022. Kwon pleaded guilty in August to conspiracy and wire fraud related to Terraform Labs. U.S. prosecutors had recommended a 12-year sentence, while the defense sought 5 years. Judge Paul A. Engelmayer ultimately imposed 15 years with credit for time served, describing the collapse as an 'epic' and 'generational' fraud.
From 2018 to 2022, Kwon allegedly orchestrated schemes to defraud buyers of Terraform-issued cryptocurrencies and misrepresented the stability mechanisms that were supposed to maintain the UST peg. He also concealed the role of Jump Trading. The UST stablecoin failed to maintain its $1 peg in May 2021, and TerraUSD finally collapsed in May 2022, triggering a crypto sector-wide crash.
Kwon was arrested in Montenegro in March 2023 on forged-document charges and was extradited to the United States in December. The case involves legal actions in both the U.S. and South Korea.
