A U.S. federal judge in Manhattan imposed a 15-year prison term on Terraform Labs founder Do Kwon after victims described severe financial harm from the 2022 collapse of TerraUSD/Luna. Kwon pleaded guilty to conspiracy to defraud and wire fraud and will forfeit more than $19 million.

Judge Paul Engelmayer sentenced Do Kwon on December 11, 2025, following a guilty plea in the New York case tied to the 2022 collapse of the TerraUSD stablecoin and Luna token, a failure prosecutors say wiped out roughly $40 billion in investor value. Victim testimony detailed substantial financial and personal consequences, which the judge cited in imposing a lengthy sentence for what he characterized as a multi‑billion‑dollar deception. Kwon admitted misleading investors about steps taken to restore TerraUSD’s peg and previously resolved civil claims with the SEC; criminal proceedings culminated in the forfeiture order exceeding $19 million. Prosecutors argued the conduct was systemic and broadly harmful to retail investors and the broader crypto market. The sentence underscores intensified enforcement of crypto fraud and is likely to be cited in future cases as courts weigh penalties for large, coordinated digital-asset schemes.