The U.S. court sentenced Do Kwon, the founder of Terra, to 15 years in prison, marking the conclusion of one of the biggest fraud cases in crypto history.
The ruling was made on December 11, 2025, after Kwon pleaded guilty to the charges earlier this year.
Summary of the Crypto Winter of 2022?
This ruling is considered the conclusion of a legal saga lasting 3 years and 7 months, which began after the algorithmic stablecoin ecosystem of Terra collapsed in May 2022 and resulted in the loss of market value worth tens of billions of USD, marking the beginning of many more crypto dominoes falling in the industry.
The prosecutor argued that Kwon intentionally provided misleading information to investors regarding the stability of TerraUSD and the support for his broader ecosystem.
Kwon's prison sentence is shorter than the 25 years of Sam Bankman-Fried, the founder of FTX, but both cases have changed the attitude of global regulators towards digital assets.
The prosecutor emphasized the enormous damage caused by the collapse of Terra, including significant losses for many retail investors and the cascading effects on lending platforms and hedge funds.
Kwon had been charged in both the United States and South Korea before being extradited, with his confession bringing the entire process under U.S. jurisdiction and leading to today's ruling.
The court highlighted the protection of investors and the accountability of wrongdoers as key factors in determining the penalties in this case.
This ruling marks a significant turning point for the Terra community, where everyone continues to trade legacy tokens like LUNC and LUNA despite the network's collapse. Market reactions remain volatile as traders attempt to assess the impact of Kwon's conviction.
Once the case is concluded, regulators are expected to use this ruling as a reference for future proceedings related to algorithmic stablecoins and high-risk financial engineering in crypto.
