A judge in New York federal court sentenced Terraform Labs co-founder Do Kwon to 15 years in prison for his role in the collapse of UST and LUNA, which erased nearly $40 billion from the cryptocurrency industry in 2022.
Judge Paul Engelmayer noted that Kwon had provided false information to investors for roughly 4 years. These deceptive practices were considered far more damaging than ordinary investment mistakes.
Testimony during the proceedings showed the impact on individuals affected by the collapse. One person, Tatiana Dontsova, shared that she sold her home in Moscow to invest and was left with only $13.
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The company’s bankruptcy records confirm that about 16,500 people were affected.
A plea agreement in August 2025 saw Kwon admit to wire fraud and conspiracy to defraud. He accepted forfeiture of more than $19 million in profits, while US prosecutors were set to recommend a sentence capped at 12 years.
The judge chose a longer sentence by citing the broad consequences and level of dishonesty involved. He stated:
Your fraud was unusually serious. For four years you publicly lied to the market <…> What makes what you did so despicable is that you traded on trust.
Before the sentence was announced, Kwon said he had reflected on his mistakes and hoped to serve his time in his home country. He mentioned the possibility of transfer to South Korea after serving part of his sentence in the US.
Charges also await Kwon in South Korea, where penalties could reach an additional 40 years in prison.
Recently, Judge Engelmayer sought clarity on how Do Kwon’s South Korea and Montenegro charges could affect his upcoming US sentencing. What did he say? Read the full story.
