coincodex.com
Key highlights:
- A US federal judge sentenced Terraform Labs co-founder Do Kwon to 15 years in prison for wire fraud tied to the Terra collapse.
- Victims told the court they lost life savings, homes, and financial security after Terra’s $40 billion implosion.
- Prosecutors said Do Kwon misled investors for years, calling the case one of the most damaging crypto frauds to date.
Terraform Labs co-founder Do Kwon was sentenced to 15 years in prison after pleading guilty to wire fraud and conspiracy charges linked to the collapse of the Terra ecosystem. The sentence was handed down by a federal judge in the Southern District of New York following emotional testimony from victims who described devastating financial losses.
OK - Do Kwon sentencing in crypto case, US wants 12 years, Do asks 5, 6 victims set to testify www.patreon.com/posts/crypto... Inner City Press wrote the book on Luna www.amazon.com/Crypto-Death... and will live tweet, thread below
— Inner City Press (@innercitypress.bsky.social) December 11, 2025 at 7:15 PM
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The Terra collapse in 2022 wiped out an estimated $60 billion from the cryptocurrency market and triggered one of the most severe crises in the industry’s history.
Judge Paul Engelmayer rejected sentencing requests from both prosecutors and defense attorneys before imposing the 15-year term. Prosecutors had sought 12 years, while the defense argued for five.
The judge said in court that prosecutors had sought a 12-year sentence, which he considered unreasonable, while the five years requested by the defense was so implausible that it would have required appellate review.
Victims describe losses as judge condemns fraud
Before sentencing, six victims addressed the court by phone. Prosecutors said the total number of victims affected by the Terra collapse is approximately 16,500, according to filings in Terraform Labs’ ongoing bankruptcy case.
Several victims accused Kwon of avoiding responsibility even after the collapse, pointing to the launch of Terra 2.0 following the failure of the original Terra Luna token, which is now known as LUNC. Meanwhile, the Terra 2.0's chain token retains the old LUNA ticker.
Judge issues warning to crypto industry
Judge Engelmayer sharply criticized Kwon’s conduct, describing the fraud as deliberate and prolonged.
“Your offense caused real people to lose $40 billion in real money, not some paper loss,” Engelmayer told Kwon, calling it “a fraud on an epic, generational scale.”
He added that without Kwon’s guilty plea, the sentence would have been longer.
Extradition, prison time, and what comes next
Do Kwon will receive credit for time already served in US custody, as well as 17 months of pre-extradition detention in Montenegro. After serving approximately seven and a half years in the United States, he may be extradited to South Korea, where he faces potential additional charges carrying sentences of up to 40 years.
Before sentencing, Kwon addressed the court, expressing regret and asking to serve his punishment in his home country.
Kwon said he had spent the entire time reflecting on what he could have done differently, adding that four years had passed since the collapse and three years since he last saw his family
fter being arrested in Montenegro, Do Kwon was extradited to South Korea after a court ruling. Source: Reuters/Stevo Vasiljevic
Kwon was extradited to the United States in December 2024 after months of legal battles in Montenegro, where his defense team repeatedly sought to delay the process.
His sentence places him among a growing list of high-profile cryptocurrency executives imprisoned in the United States. Former FTX CEO Sam Bankman-Fried is serving a 25-year sentence, while former Celsius CEO Alex Mashinsky received 12 years. Former Binance CEO Changpeng Zhao previously served a four-month sentence.