Do Kwon sentenced to 15 years in prison over TerraUSD and Luna collapse
Do Kwon, a South Korean national and co-founder of Singapore-based Terraform Labs, was sentenced to 15 years in prison by US District Judge Paul A Engelmayer in Manhattan federal court. Kwon pleaded guilty in August to conspiracy to defraud and wire fraud in relation to the collapse of TerraUSD and Luna, cryptocurrencies developed by Terraform Labs.
TerraUSD collapsed in May 2021, falling below its $1 peg, and its failure, along with Luna, caused an estimated $40bn in losses. Prosecutors allege Kwon misled investors about the coin’s value-restoration mechanism and secretly arranged for a trading firm to buy millions of TerraUSD to artificially boost its value.
The judge described the scheme as an epic, generational-scale fraud that caused substantial harm. Kwon expressed remorse in court, stating he spent years contemplating what he could have done differently and how to make things right. This case followed a wave of US crypto prosecutions after token slumps in 2022 and the collapse of several companies.
