Do Kwon, the co-founder of Terraform Labs, has been sentenced to 15 years in U.S. prison for major crypto fraud after the collapse of his stablecoin TerraUSD (UST) and related token Luna. The collapse wiped out about $40 billion in investor money and triggered losses across the crypto market, affecting countless retail and institutional investors.
Kwon pleaded guilty to fraud charges in Manhattan federal court and admitted that he misled investors about the stability and reliability of his digital coins. U.S. District Judge Paul Engelmayer described his actions as an “epic, generational fraud” that caused deep financial harm to many people.
During sentencing, the court rejected earlier recommendations that Kwon serve less time, emphasizing the scale of losses and investor impact. Victims told the court about life-altering effects of the crash, including lost savings, broken families and severe financial stress.
Kwon was previously arrested in Europe while trying to evade authorities and was later extradited to the U.S. He also agreed to forfeit over $19 million and faces potential legal action in his home country, South Korea.
The case highlights growing crypto regulation and the risks of misleading claims in digital finance.
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