Crypto Founder Do Kwon Sentenced to 15 Years for $40 Billion Collapse That Shook Global Markets

Do Kwon, a South Korean entrepreneur and founder of Terraform Labs, has been given a 15-year prison term after perpetrating one of the biggest financial frauds in crypto history. It should be noted that his business folding in 2022 caused a loss of approximately $40 billion among investors.

Kwon, who at one time was known as the rising star within the tech industry, created TerraUSD and its companion currency, Luna. Both were perceived as stablecoins with a focus on being pegged against the value of the US dollar. At its peak, the total value of the two currencies stood at above $50 billion. It all began to fall apart in May 2022 when TerraUSD broke its peg.

Prosecutors said that Kwon misled investors about the role of a trading company that artificially supported TerraUSD’s price. Kwon had previously fled South Korea before the collapse and was eventually arrested in 2023 while trying to travel with forged documents in Montenegro. Kwon was then extraditionned to the United States and plead guilty to fraud and wire conspiracy charges in August 2025.

At the sentencing stage, it was pointed out that the extent of the harm was enormous. It “was fraud on an epic, generational scale.” The victims had testified as to the loss of life savings, homes, and futures as a result of the collapse. There were apologies offered by Kwon, but then there were efforts at evading responsibility.

Asides from serving his prison term, Kwon would have to forfeit more than 19 million dollars worth of ill-gotten gains. Kwon will have the option to serve some prison time in South Korea, too, as more charges await him there.