A US courtroom yesterday (Thursday) sentenced Do Kwon, the co-founder of Terraform Labs, to fifteen years in jail after he pleaded responsible to wire fraud and conspiracy to defraud buyers. The collapse of Terraform Labs worn out $40 billion in buyers’ cash.
One other Crypto Mogul Goes to Jail
Based on the order of Decide Paul Engelmayer on the US District Courtroom for the Southern District of New York, Kwon will obtain credit score for time served within the US and 17 months of pre-extradition custody.
Earlier than the sentencing, the decide additionally heard from a number of the victims of Terraform. Kwon additionally testified in courtroom earlier than the sentencing.
“I would really like everybody to know that I’ve spent all my time eager about what I may have achieved, and what I can do,” Kwon mentioned earlier than the sentencing. “It’s been 4 years for the reason that crash, three years since I’ve seen my household. I’d wish to [do] my penance in my dwelling nation.”
Do Kwon: I would really like everybody to know that I’ve spent all my time considering what I may have achieved, and what I can do. It has been 4 years for the reason that crash, three years since I’ve seen my household. I might wish to my penance in my dwelling nation.
— Interior Metropolis Press (@innercitypress) December 11, 2025
He’s additionally going through fraud prices in South Korea, his dwelling nation.
The Collapse that Dented the Crypto Trade
Kwon was identified for founding Terraform Labs. Nevertheless, the mission’s two cryptocurrencies, TerraUSD and Luna, collapsed in 2022, erasing about $37 billion in worth. The autumn of the algorithmic stablecoin led to the closure and downfall of a number of different cryptocurrency corporations.
In 2023, Kwon and an affiliate had been arrested in Montenegro whereas making an attempt to journey to Dubai utilizing pretend journey paperwork. He was then extradited to the US, whereas South Korea was additionally making an attempt to push his extradition.
In June, Terraform Labs and Kwon agreed to a settlement with the US Securities and Trade Fee (SEC), committing to pay round $4.5 billion in restoration and civil penalties. Kwon personally agreed to pay at the least $204.3 million.
At first, the US regulator sought $5.3 billion in settlement. Nevertheless, the defendants’ authorized group countered with a proposal of $1 million in civil penalties and no restoration or injunction.
Moreover, Kwon and Terraform Labs had been completely banned from shopping for or promoting crypto asset securities, together with tokens within the Terra ecosystem.
Earlier this 12 months, Terraform Labs filed for chapter in Delaware, United States. Within the courtroom submitting, the defunct firm reported liabilities between $100 million and $500 million, with estimated belongings in the identical vary.
After the sentencing, Kwon joined FTX founder and former CEO Sam Bankman-Fried, who obtained a 25-year jail sentence.
This text was written by Arnab Shome at www.financemagnates.com.
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