Do Kwon sentenced to 15 years for involvement in TerraUSD collapse

Do Kwon pleaded guilty to conspiracy and spreading false information about the stability of TerraUSD.

US court sentences Terraform Labs co-founder to 15 years

12.12.2025 - 12:15

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Key points:

Do Kwon received 15 years in prison for fraud related to the collapse of the TerraUSD stablecoin and investor losses of approximately $40 billion.
The court found that he misled users about the project’s operations and concealed key information.

Terraform Labs co-founder Do Kwon has been sentenced to 15 years in prison for his role in the collapse of the TerraUSD ecosystem. The project’s collapse in 2022 led to losses of around $40 billion and became one of the biggest disasters in the history of the cryptocurrency market.

Kwon, a South Korean citizen, pleaded guilty to charges of fraud and conspiracy. He was sentenced by Manhattan Federal District Court Judge Paul A. Engelmayer. The judge rejected the defense’s request to reduce the sentence to five years and also called the prosecution’s proposal of 12 years in prison insufficient.

Why Do Kwon received 15 years

According to court records, from 2018 to 2022, Kwon defrauded investors by claiming that the TerraUSD (UST) stablecoin and related tokens were stable. The Terraform Labs team assured users that UST was pegged to the dollar, although in reality, the mechanism for maintaining the exchange rate did not work as claimed.

When UST lost its peg in 2021, Kwon made a series of false statements that the system had recovered on its own. At the same time, he concealed the role of Jump Trading, which supported the stablecoin to avoid collapse. In May 2022, the situation repeated itself, but with catastrophic consequences: TerraUSD collapsed completely, causing a chain reaction of declines across the entire crypto market.

Judge Engelmayer called Kwon’s actions “a fraud on an epic, generational scale” and said that the consequences of his schemes had harmed millions of people.

After the collapse, Kwon was charged in the US and South Korea. In 2023, he was arrested in Montenegro for using fake documents and then sent to the US, where the trial took place.

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