Do Kwon

What the public record shows

Do Kwon, co-founder of Terraform Labs — creator of the TerraUSD “stablecoin” and its sister token Luna — pleaded guilty in August 2025 to two federal counts: conspiracy to commit commodities, securities, and wire fraud, and a substantive count of wire fraud. On December 11, 2025, Judge Paul A. Engelmayer sentenced him to 15 years in prison — more than even prosecutors requested — calling his crimes “a fraud of epic generational scale.”

The scheme

• TerraUSD was marketed as a stablecoin that reliably held its $1 peg through a self-correcting algorithm. Prosecutors charged that Kwon misrepresented how the peg actually held — including secret interventions to prop it up — while promoting the ecosystem to retail investors worldwide, many drawn by ~20% “Anchor Protocol” yields.
• In May 2022 the peg broke, and roughly $40 billion in TerraUSD and Luna value evaporated in days, wiping out retail savers globally and helping trigger the wider 2022 crypto credit collapse.
• Kwon left South Korea, was arrested in Montenegro in 2023 traveling on falsified documents, and was extradited to the U.S. He still faces charges in South Korea.

Why we rate this 1 / 10 — Avoid

A guilty plea and a 15-year sentence over one of the largest investor-loss events in crypto history. “Algorithmic stability” turned out to mean stability claims without reserves — the collapse was a question of when, not if.

Verify it yourself

• PACER — United States v. Kwon, S.D.N.Y.
• News coverage of the plea and sentencing — linked in Sources.

Bottom line

Convicted by his own plea. A peg is a promise. Before trusting any “stable” asset, find out what actually backs it — and who audits that answer.

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