📉 Do Kwon gets 15 years for Terra's $45B collapse
He pleaded guilty and loses $19M of his gains. Whether he faces a second trial in South Korea is still unresolved. ⏳
By MrMoney, business desk · Desk editor Laima Ērkšķe-Kreicberga · · 4 min read
SENTENCEDPhoto: FAQX™ We mining it. · CC BY 3.0By the numbers
- 2y 10mfrom first to latest entry on record
- 8receipts behind this story
Do Kwon's run ended on 11 December 2025, when a Manhattan federal court sentenced him to 15 years in prison - three more years than prosecutors had asked for, The Korea Times reported. The number behind it is bigger: TerraUSD and Luna, the stablecoin pair he built at Terraform Labs, broke in May 2022 and wiped out tens of billions of dollars in market value. He was arrested the following spring in Montenegro, trying to board a plane to Dubai on forged documents. He spent the next 18 months fighting to be sent to Seoul instead; he landed in a Manhattan courtroom.
What we know
- Do Kwon was sentenced to 15 years in prison on 11 December 2025, four months after pleading guilty to two counts of fraud.
- The collapse of Terraform Labs' TerraUSD and Luna in May 2022 wiped out about $45 billion in market value.
- Kwon was arrested in Montenegro in March 2023 while trying to board a plane to Dubai, and US prosecutors charged him with fraud.
- The US Securities and Exchange Commission charged Kwon and Terraform Labs in February 2023 with orchestrating a multi-billion-dollar crypto asset securities fraud.
- After a legal battle of more than 18 months, Kwon was extradited from Montenegro to the United States on 31 December 2024.
The collapse
7 May 2022 - the run begins
On 7 May 2022, two large addresses pulled 375 million UST out of Anchor, Terra's high-yield lending protocol, and the run began as other big holders followed, an NBER study of the crash found. That was the first crack in the dollar peg.
See the receipt (opens in a new tab)9 May 2022 - the peg breaks
UST had slipped to a low of $0.985 on 8 May, and the Luna Foundation Guard loaned $1.5 billion trying to hold the dollar peg, the NBER study found. It failed: UST fell to about $0.75 late on 9 May and below $0.20 by 13 May, while Luna slid from an April peak of $119.18 toward zero.
See the receipt (opens in a new tab)"I am heartbroken about the pain my invention has brought on all of you."
Do Kwon, speaking as the tokens collapsed, per BBC News
The charges and the arrest
February 2023 - the SEC calls it fraud
The US Securities and Exchange Commission - the federal markets regulator - charged Kwon and Terraform Labs with 'orchestrating a multi-billion dollar crypto asset securities fraud,' BBC News reported. SEC chairman Gary Gensler said the two 'committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.'
See the receipt (opens in a new tab)23 March 2023 - arrested in Montenegro
Kwon was arrested in Montenegro on 23 March 2023 while trying to board a plane to Dubai, and US prosecutors charged him with fraud, Bloomberg reported. A Montenegro court later found him guilty of forging the travel documents he was carrying, BBC News reported.
See the receipt (opens in a new tab)Washington and Montenegro, at the same time
January 2024 - Terraform Labs files for bankruptcy
While Montenegro weighed where to send him, Terraform Labs filed for bankruptcy in the United States in January 2024, BBC News reported.
See the receipt (opens in a new tab)March 2023 - December 2024 - the extradition fight
For more than 18 months after his arrest, Montenegro - which has no extradition treaty with either country - weighed competing requests from the United States and South Korea, and Kwon himself pushed to be sent to Seoul rather than New York, The Korea Times reported. The Montenegrin Ministry of Justice approved the extradition in December 2024, saying Kwon had agreed to it, and he was handed to the United States on 31 December 2024, BBC News reported.
See the receipt (opens in a new tab)The plea and the sentence
August 2025 - the guilty plea
Kwon pleaded guilty in August 2025 to conspiracy to commit fraud and wire fraud under a plea agreement, The Korea Times reported. Prosecutors agreed to seek a 12-year term; combined, the counts he had faced carried a theoretical maximum of up to 130 years.
See the receipt (opens in a new tab)11 December 2025 - 15 years
District Judge Paul A. Engelmayer sentenced Kwon to 15 years in prison and ordered him to forfeit $19 million, calling the scheme 'a fraud on an epic, generational scale,' The Korea Times reported. It is widely expected that after serving half the term he may apply to the International Prisoner Transfer Program - a treaty that lets prisoners serve out sentences at home - to return to South Korea, where he could face a separate trial on capital-markets charges that prosecutors there say could carry more than 30 years.
See the receipt (opens in a new tab)The money trail
| Amount | What it was | Where it comes from |
|---|---|---|
| $45 billion | Market value wiped out in the TerraUSD/Luna collapse, May 2022 | Bloomberg |
| $1.5 billion | Loaned by the Luna Foundation Guard to defend the dollar peg, 8 May 2022 | NBER study |
| 375 million UST | Pulled out of the Anchor protocol by two large addresses on 7 May 2022, starting the run | NBER study |
| $19 million | Forfeited under Kwon's sentence after his August 2025 guilty plea | The Korea Times |
| Tens of millions | Allegedly funneled out of a linked entity after his March 2023 arrest, per South Korean prosecutors | Bloomberg |
| $7 million | Sent to law firm Kim & Chang before the collapse, per KBS News; Seoul prosecutors said the report 'isn't false' | Bloomberg / KBS News |
The response
Kwon's guilty plea is the closest thing to an admission on record: two counts, admitted, $19 million forfeited. Before that, the posture was denial. 'I've stolen no money,' he wrote on Twitter in February 2023, 'and never had secret cashouts,' Bloomberg reported, and he said he was in 'full cooperation' with any government agency that asked, per BBC News. When South Korean prosecutors alleged in June 2023 that he had funneled tens of millions of dollars out of an entity tied to the project after his arrest, a lawyer for Kwon could not be reached for comment, Bloomberg reported.
If you want to see how fast $45 billion can evaporate, that table is the receipt.
Quick quiz · 3 questions
The Do Kwon file
- Ruled
Kwon was sentenced to 15 years in prison. This story
- Admitted
Kwon pleaded guilty to conspiracy to commit fraud and wire fraud under a plea agreement; the court later ordered him to forfeit $19 million. This story
- Ruled
Kwon was extradited from Montenegro to the United States. This story
- Filed
Terraform Labs filed for bankruptcy in the US in January 2024. This story
- Filed
Kwon was arrested in Montenegro while trying to board a plane to Dubai, and US prosecutors charged him with fraud. This story
- Filed
The SEC charged Kwon and Terraform Labs with orchestrating a multi-billion-dollar crypto asset securities fraud. This story
On file: The Do Kwon file
The Ledger
On the record
- Do Kwon pleaded guilty to two counts of fraud in August 2025 and was sentenced to 15 years in prison on 11 December 2025.
- The May 2022 collapse of TerraUSD and Luna wiped out tens of billions of dollars in market value; estimates run from about $40 billion to $50 billion.
- District Judge Paul A. Engelmayer ordered Kwon to forfeit $19 million; US prosecutors had sought a 12-year sentence.
Still rumour
- Whether Kwon will face a second trial in South Korea, or transfer the remainder of his US sentence there, has not been decided.
- South Korean prosecutors alleged in June 2023 that Kwon funneled tens of millions of dollars out of a linked entity after his arrest; a lawyer for Kwon could not be reached for comment, and the claim remains an allegation.
That's the record. The rest is rumour. - MrMoney
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