Terra founder Do Kwon sentenced to 15 years: $40 billion crash case settled

【CryptoPunk】The final verdict in the Terra ecosystem collapse case is finally in—Do Kwon has been sentenced to 15 years in prison, three years more than the 12 years requested by the prosecutors.

Judge Paul Engelmayer of the Southern District Court of New York was uncompromising: “He chose to lie and made disastrous decisions.” This sounds like a wake-up call for the entire crypto industry. Looking back at the case timeline: the global shock of the Terra USD and Luna collapse in 2022, which directly wiped out $40 billion in market value, also caused a series of institutional collapses. Prosecutors accused Kwon of playing word games with investors regarding token risks and stabilization mechanisms, and of false advertising.

In a dramatic turn, Kwon was arrested in Montenegro with a fake passport (March 2024), and after a tug-of-war over extradition, he was sent to the U.S. in December last year. He pleaded guilty to wire fraud and conspiracy to commit fraud in August, but the initial list of charges was frightening—commodity fraud, securities fraud, market manipulation, conspiracy to money laundering… basically, all related charges were slapped on him.

The sentencing does not mean the matter is over. South Korea is still waiting for him, and there may be other jurisdictions lining up. The concept of algorithmic stablecoins is likely to be closely monitored by regulators from now on.