In brief
- The man behind the TerraLUNA/UST ecosystem crash of 2022 will be sentenced later today in New York.
- He already pleaded guilty to crimes such as conspiracy to commit commodities fraud, securities fraud, and wire fraud in August.
- Prosecutors asked the court to sentence Kwon to 12 years, citing his guilty plea among other factors.
Disgraced Terraform Labs founder Do Kwon is set to be sentenced in a Manhattan court later today, December 11, by U.S. District Judge Paul Engelmayer.
Do Kwon, 33, pleaded guilty to a basket of fraud charges in August, following an international run from the law, including conspiracy to commit commodities fraud, securities fraud, and wire fraud. The South Korean entrepreneur admits to defrauding investors by making false claims about his company’s blockchain products.
He was arrested in March 2023 in the Balkan country of Montenegro while using a forged passport before being extradited to the U.S. in December 2024. His journey to evade arrest also took him through the United Arab Emirates and Singapore.
In 2022, his company’s TerraLUNA/UST ecosystem collapsed, causing losses of up to $40 billion for investors and sending severe shockwaves through the broader crypto market, impacting defunct crypto exchange FTX and crypto lender Celsius.
Terra’s UST was branded as an “algorithmic stablecoin,” meaning its value wasn’t backed by traditional assets like U.S. Treasuries, unlike Circle’s USDC or Tether’s USDT.
According to AP News, official federal sentencing guidelines recommend a prison term of about 25 years. In filings earlier this month, prosecutors asked the court to sentence Kwon to 12 years, citing his guilty plea, his time served in Montenegro, and the fact that he is also expected to face charges in his native South Korea.
“I alone am responsible for everyone’s pain,” Kwon said in a letter to the judge. “The community looked to me to know the path, and I in my hubris led them astray.”
He added: “I made misrepresentations that came from a brashness that is now a source of deep regret.”
According to AP, Kwon’s lawyers have requested that his sentence be limited to five years, arguing that his conduct was driven not by greed but by “hubris and desperation.” Do Kwon is also set to forfeit $19.3 million, as well as some of his properties, as part of a plea deal.
Crypto sentencing in 2025
Jail sentences for the best-known crypto criminals have varied widely. FTX founder Sam Bankman-Fried was sentenced to 25 years for his offenses in March 2024. Meanwhile, CEO of crypto investment firm Celsius, Alex Mashinsky, was given 12 years in May 2025.
Binance founder Changpeng Zhao was handed a sentence of four months in federal prison in April 2024 for failing to maintain an effective anti–money laundering program on the platform. He was pardoned by President Donald Trump in October 2025.
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