A federal court in New York has sentenced Terraform Labs co-founder Do Kwon to 15 years in prison for orchestrating the spectacular collapse of the TerraUSD (UST) stablecoin and its sister token LUNA.
The 2022 implosion wiped out approximately $40 billion in market value virtually overnight and triggered a chain reaction that deepened the broader cryptocurrency bear market.
Prosecutors successfully proved that Kwon deliberately misrepresented the algorithmic stability of UST to investors while secretly arranging off-the-books interventions to artificially prop up its dollar peg.
The presiding judge characterized the fraud as one of the most destructive episodes in the brief history of digital assets, noting that it inflicted devastating financial losses on retail and institutional investors across the globe.
Beyond the lengthy prison term, Kwon has been ordered to surrender more than $19 million in illicit proceeds. Separate criminal proceedings continue against him in South Korea, where authorities are pursuing additional charges.
Legal experts view the severe penalty as a pivotal milestone in cryptocurrency oversight, sending a clear message that regulators and courts will impose serious consequences for deceptive practices in the industry.
