Do Kwon to be sentenced in U.S. fraud case
Terraform Labs co‑founder Do Kwon is set to be sentenced in Manhattan federal court on Thursday after pleading guilty in August to fraud tied to the 2022 collapse of TerraUSD and Luna, which erased roughly $40 billion in value. Prosecutors seek 12 years in prison and $19 million forfeiture—below guidelines near 25 years—citing his plea, pending Korean prosecution, and time served in Montenegro, while Kwon’s lawyers ask for no more than five years.
📌 Key Facts
- Kwon pleaded guilty in August 2025 in Manhattan federal court to fraud charges connected to TerraUSD/Luna.
- Prosecutors request a 12‑year sentence and $19 million forfeiture; guidelines suggest about 25 years.
- TerraUSD/Luna collapse in 2022 wiped out about $40 billion; Kwon was extradited after a 2023 arrest in Montenegro.
📊 Relevant Data
TerraUSD was an algorithmic stablecoin that relied on minting and burning Luna tokens to maintain its $1 peg, which failed in May 2022 leading to a death spiral and the collapse of the ecosystem.
Anatomy of a Run: The Terra Luna Crash — Harvard Law School
The Terra/Luna collapse in May 2022 triggered market turmoil resulting in over $450 billion in losses across the broader cryptocurrency market.
Crypto shocks and retail losses — Bank for International Settlements
Prior to the passage of the GENIUS Act in 2025, there was no comprehensive federal regulatory framework for stablecoins in the United States, with regulation limited to some state-level measures.
What are stablecoins, and how are they regulated? — Brookings Institution
In 2023, cryptocurrency investment fraud resulted in over $5.6 billion in reported losses in the United States, marking a 45% increase from 2022.
In 2023, US adults over the age of 60, who comprise approximately 23.6% of the population, reported $1.65 billion in losses from cryptocurrency scams, accounting for about 29.5% of the total $5.6 billion in such losses.
FBI Crypto Fraud Report 2023: Crypto Scams Surge 45%, $5.6B Lost — Merkle Science