Key Highlights
- Do Kwon was sentenced to 15 years in the U.S. over his role in the TerraUSD collapse.
- South Korean prosecutors say he could still face a separate trial at home after serving his prison time in the U.S.
- Authorities warn that the case underscores rising legal risks for crypto founders.
More than three years after the TerraUSD and Luna collapse wiped out an estimated $40 billion, the legal saga around Terraform Labs founder Do Kwon is still not over. A New York judge sentenced Kwon to 15 years in prison and ordered him to forfeit $19 million in gains. The ruling followed convictions on nine counts, with the court calling the Terra scheme “a fraud on an epic, generational scale.”
According to a report by local media outlet The Korea Times, South Korean prosecutors say the case isn’t over. If Kwon is transferred back after his U.S. sentence, he could face a new trial tied to 200,000 victims and 300 billion won in losses, with a possible 30-year sentence.
The case against Do Kwon
Do Kwon, a South Korean national and co-founder of Terraform Labs, was sentenced in the U.S. after pleading guilty to fraud and money laundering tied to one of crypto’s largest collapses. Following the collapse of TerraUSD in 2022, South Korean prosecutors issued an arrest warrant for Kwon, while U.S. agencies launched parallel investigations.
The investigations uncovered evidence that Terraform Labs had secretly relied on external firms to prop up Terra’s price, contradicting public claims that the UST stablecoin’s algorithm alone restored its peg. By early 2023, the case had gone global, with Kwon arrested in Montenegro while attempting to travel using fake documents.
By mid-2025, pressure mounted in the U.S. case. Prosecutors accused Kwon of orchestrating a scheme built on misleading statements to investors, while regulators tied the Terra crash to a broader chain reaction that later engulfed firms like FTX.
In August, reports emerged that Kwon was considering a guilty plea. Markets reacted immediately, with Terra-linked tokens falling again. While his defense argued that ongoing Korean investigations should limit U.S. punishment, the court rejected that reasoning at the time.
As Kwon’s case drags on, South Korea is also battling a rise in crypto-related crime. This week, cybersecurity firms warned that North Korean hackers are using fake Zoom and Teams meetings to steal crypto and sensitive data, targeting professionals through social engineering.
Also read: South Korea Closes Regulatory Gaps After Upbit Breach
