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Author: Nancy, PANews
On December 11, 2025, 1314 days after the Terra crash, Do Kwon finally faced justice and was sentenced to 15 years in prison.
Although this epic fraud case has come to an end, over a million victims and 40 billion dollars evaporated undoubtedly serve as an expensive and painful lesson in the history of cryptocurrency development.
Dream shattered Luna, sentenced to 15 years in prison
On December 11, Do Kwon, dressed in a yellow prison uniform from Essex County, New Jersey, sat in the defendant's seat accompanied by four lawyers. This once-glamorous crypto tycoon faced his final judgment.
At the hearing, Kwon's defense team attempted to play the emotional card, requesting the judge to limit the sentence to within 5 years. They argued that Kwon's criminal behavior stemmed more from arrogance and despair rather than extreme greed, and stated that he was already serving time in Montenegro and might face prosecution in South Korea.
However, this claim was strongly rebutted by U.S. prosecutors. They pointed out that the stablecoin concept promoted by Terraform Labs, as well as the cases it claimed to have implemented through applications like Chai, were built on lies from the very beginning. At its peak, Kwon's tokens skyrocketed in value, and he even named his daughter "Luna" to commemorate the so-called "greatest invention."
The prosecution emphasized that the $40 billion collapse of the Terra ecosystem not only triggered a chain crisis in the entire cryptocurrency market but also indirectly led to the bankruptcy of SBF's FTX exchange and initiated a crypto winter. (Related reading: LUNA and UST deep in the "big short") In the face of such painful consequences, Kwon and his supporters attempted to construct a "counter-narrative," describing the collapse as a black swan event or market manipulation, showing no remorse whatsoever. Furthermore, Kwon's embezzlement of funds, use of fake passports to flee to Singapore and Montenegro, and even attempts to travel to the UAE all demonstrate his high risk of reoffending. Based on this, the prosecution recommended a 12-year prison sentence.
However, U.S. District Judge Engelmayer rejected the defense's absurd request for a 5-year sentence and stated that the 12 years recommended by the prosecution was too lenient and did not reflect the devastating impact suffered by the victims.
"This is an epic, generational-scale fraud. In the history of federal prosecutions, few frauds have caused damage that can compare to this." Judge Engelmayer harshly criticized Kwon for choosing to deceive those investors who entrusted their life savings to him instead of telling the truth, noting his infamous tweet, "Deploying more capital – steady lads."
Ultimately, the judge sentenced Kwon to up to 15 years in prison.
Besides the U.S., Kwon will still face fraud charges in South Korea. At the hearing, Kwon stated that he had not seen his family for three years and hoped to serve his sentence in South Korea. In response, U.S. prosecutors indicated that if Kwon could abide by the agreement, they would support his application to be transferred to South Korea to continue serving his sentence after completing half of his sentence. In August this year, Kwon pleaded guilty to two counts of conspiracy to commit fraud and wire fraud, and as part of the plea agreement, he also agreed to forfeit over $19 million in assets and some properties.
Over a million victims, mysterious community control
From his arrest at Podgorica Airport in Montenegro in March 2023 to being imprisoned in the U.S. in December 2024, this 20-month legal tug-of-war finally reached its conclusion in a federal court in New York.
Kwon's capture once sparked a extradition battle between the U.S. and South Korea. During this time, he reached a settlement agreement with the U.S. SEC for up to $4.5 billion, including the forfeiture of $3.6 billion in illegal gains. After more than a year of detention and diplomatic negotiations, Montenegrin authorities finally handed him over to U.S. law enforcement at the end of last year. Facing nine charges from U.S. prosecutors, including securities fraud and telecommunications fraud, Kwon initially refused to plead guilty.
Until August of this year, Kwon finally admitted to two counts of financial fraud, stating, "I concealed the truth about the trading company's intervention in restoring the peg and made false statements; my actions were wrong." Given his guilty plea, although the statutory maximum sentence is 25 years, U.S. prosecutors recommended a sentence of no more than 12 years.
This trial not only concerns Kwon's personal fate but also affects millions of Terra victims worldwide.
On the eve of the hearing, an incident occurred, causing dissatisfaction from Judge Engelmayer due to the inefficiency of the U.S. prosecutors, who did not notify Terra victims until December 1, and the bankruptcy administrator delayed sending emails until December 8, leaving victims almost no time to submit statements to the court. Judge Engelmayer noted that although the Terra bankruptcy case involves about 16,500 creditors, the number of victims behind it could be as high as a million, stating, "You need to do better."
Judge Engelmayer read 315 hastily sent victim letters overnight and stated that Kwon had an almost mysterious control over Terra investors, with many appearing as cult-like followers who could never awaken.
At this hearing, the victims' accusations vividly conveyed the devastating impact of the Terra collapse. Some lost their homes, others wiped out their retirement funds and children's education savings, and some even found themselves homeless.
A victim wrote, "Do Kwon's communications all said everything was under control. Then the de-pegging happened, and I couldn't close my eyes for four days... We were told to trust him, and then he disappeared." Another victim lamented angrily, "My trust was weaponized. Do Kwon packaged himself as a visionary, and my hard-earned capital just evaporated." Some even lost $200,000 in savings accumulated over 17 years overnight, pleading in a letter, "Your Honor, please hold him accountable."
Listening to some of the letters over the phone, Kwon expressed belated apologies to the victims in court. "Their stories are heart-wrenching and remind me again of the enormous losses I caused. I want to tell these victims that I am very sorry. In every waking moment over the past few years, I've been thinking about what I could have done differently back then and what I can do now to make amends." In a letter submitted to the court last month, Kwon also wrote, "Looking back, I cannot understand my arrogance... All the pain belongs to me alone. I hope to accept any punishment that can bring even a little comfort to those I have let down."
This confession is in stark contrast to his former arrogant image. Notably, just hours before the Terra collapse in May 2022, Kwon mocked critics on Twitter, even leaving behind the arrogant remark, "I don't debate with poor people."
Note: Do Kwon arrogantly responded to Frances Coppola's concerns about the design of algorithmic stablecoins.
A sarcastic scene also unfolded in the courtroom. When Kwon, dressed in a yellow prison uniform and handcuffed, was escorted into the elevator, many supporters in the audience applauded him, and some even shouted, "Hang in there, Do! Hold your head up!"
