Terraform Labs Founder Do Kwon Could Face South Korean Trial After U.S. Sentencing
Do Kwon, co-founder of Terraform Labs, which created TerraUSD (UST) and LUNA, faces a potential separate criminal trial in South Korea after serving part of his 15-year sentence in the United States.
He was sentenced by U.S. District Judge Paul Engelmayer to 15 years on nine counts including fraud and money laundering, with forfeiture of $19 million. U.S. prosecutors had sought a 12-year sentence. Kwon was arrested in Montenegro in March 2023 with a forged passport and extradited to the U.S. in December following a legal battle.
The collapse of TerraUSD and LUNA in May 2022 triggered widespread market contagion and millions in losses. U.S. prosecutors revealed that an investment firm contracted by Terraform Labs secretly bought Terra to prop up its price. During sentencing, 315 victim-impact letters described suicides, bankruptcies, and health crises caused by the collapse.
Following his U.S. sentencing, Kwon could be transferred to South Korea under the International Prisoner Transfer Program, a move U.S. prosecutors do not oppose as part of his plea deal. In South Korea, he would face violations of the Capital Markets Act, with possible additional sentencing exceeding 30 years according to a senior prosecutor.
Seoul Southern District Prosecutors’ Office secured an arrest warrant for Kwon in September 2022. Approximately 200,000 Korean victims suffered losses estimated at $204 million (300 billion won), prompting domestic prosecution to seek compensation for local victims.
