A US court docket 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
In keeping with the order of Decide Paul Engelmayer on the US District Court docket 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 among the victims of Terraform. Kwon additionally testified in court docket earlier than the sentencing.
“I would love everybody to know that I’ve spent all my time interested by what I might have carried out, 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 love everybody to know that I’ve spent all my time pondering what I might have carried out, and what I can do. It has been 4 years for the reason that crash, three years since I’ve seen my household. I would wish to my penance in my dwelling nation.
— Inside Metropolis Press (@innercitypress) December 11, 2025
He’s additionally going through fraud costs in South Korea, his dwelling nation.
The Collapse that Dented the Crypto Business
Kwon was recognized for founding Terraform Labs. Nevertheless, the challenge’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 faux 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 Change Fee (SEC), committing to pay round $4.5 billion in restoration and civil penalties. Kwon personally agreed to pay at the very least $204.3 million.
At first, the US regulator sought $5.3 billion in settlement. Nevertheless, the defendants’ authorized group countered with a suggestion 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 yr, Terraform Labs filed for chapter in Delaware, United States. Within the court docket submitting, the defunct firm reported liabilities between $100 million and $500 million, with estimated property in the identical vary.
After the sentencing, Kwon joined FTX founder and former CEO Sam Bankman-Fried, who acquired a 25-year jail sentence.
This text was written by Arnab Shome at www.financemagnates.com.
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