Do Kwon Sentenced to 15 Years in Prison for the Terra LUNA Fraud

A US court has sentenced Terra founder Do Kwon to 15 years in prison, concluding one of the most consequential fraud cases in crypto history.

The decision, delivered on December 11, 2025, follows Kwon’s guilty plea earlier this year.

End of the 2022 Crypto Winter Saga?

The sentencing ends a three-year and seven-month legal saga that began after the collapse of Terra’s algorithmic stablecoin ecosystem in May 2022, which erased tens of billions in market value and triggered a cascade of failures across the crypto sector.

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Prosecutors argued that Kwon knowingly misled investors about the stability of TerraUSD and the backing of its broader ecosystem.

Kwon’s sentence is shorter than the 25 years received by FTX founder Sam Bankman-Fried, though both cases have reshaped global regulatory attitudes toward digital assets.

Prosecutors highlighted the scale of damage caused by Terra’s implosion, citing widespread retail losses and systemic fallout across lending platforms and hedge funds.

Kwon had faced charges in both the United States and South Korea before being extradited. His guilty plea consolidated proceedings under US jurisdiction, enabling today’s sentencing.

The court emphasised investor protection and accountability as central factors in determining the term.

The decision marks a turning point for the Terra community, which continues to trade legacy tokens LUNC and LUNA despite the network’s collapse. Market reaction remains volatile as traders digest the implications of Kwon’s conviction.

With the case now closed, regulators are expected to use the verdict as a reference point for future enforcement actions involving algorithmic stablecoins and high-risk financial engineering in crypto.