Do Kwon被判15年监禁，加密狱中天团再迎重磅嘉宾

On December 11th, Eastern Time, the New York Southern District Court held a sentencing hearing for Do Kwon, co-founder of Terraform Labs, in Court Room 1305. During the hearing, Judge Paul Engelmayer sentenced Do Kwon to 15 years in prison.

Do Kwon became another industry figure to receive a severe sentence, following FTX founder Sam Bankman-Fried and Celsius Network founder Alex Mashinsky.

The Myth and Collapse of Terra

Terraform Labs’ algorithm-based stablecoin project, Terra (with LUNA as its token and UST as its stablecoin), was one of the most prominent projects during the previous bull market.

Algorithmic mechanisms were a hot topic in the innovation of stablecoins during that period. Unlike traditional over-collateralization methods, algorithm-based stablecoins do not require full collateralization. Instead, they are designed to dynamically maintain price stability through market supply and demand. For example, in the Terra case, participants could mint UST by destroying equivalent amounts of LUNA, or vice versa—when demand for UST increases and prices exceed $1, arbitrage opportunities drive markets to destroy LUNA to mint UST, thereby profiting from price increases. Conversely, when demand for UST decreases and prices fall below $1, markets will be forced to destroy UST and mint LUNA, thus profiting from price reductions.

This “left foot stepping on right foot” strategy between LUNA and UST once created a miracle of growth for Terra. The supply of UST reached $18.7 billion at one point, posing a serious challenge to USDT, the king of stablecoins. The price of LUNA even approached $120, with a market value of up to $41 billion. It briefly ranked among the top five cryptocurrencies by market value. However, history has proven that any stablecoin mechanism without sufficient collateral is doomed to fail. While such mechanisms can operate temporarily in normal markets, their ability to withstand extreme situations is extremely limited. In May 2022, Terra’s bubble finally burst. Under the pressure of collective panic, Terra’s algorithmic stabilization mechanism led it deeper into a vicious cycle of decline. Within just a few days, Terra’s billions in market value, along with UST’s tens of billions in value, disappeared completely. From a macro perspective, Terra’s collapse is considered by many industry experts to be one of the key factors contributing to the prolonged market downturn. From a micro perspective, Terra’s collapse caused countless investors to suffer significant losses, with some even choosing suicide due to despair. After Terra’s collapse, prosecutors in South Korea and the United States filed charges against Do Kwon, including charges of conspiracy fraud, commodity fraud, telecommunications fraud, securities fraud, as well as conspiracy to manipulate the market and money laundering. In September 2022, Korean prosecutors issued a red notice through the International Criminal Police Organization, asking police around the world to assist in capturing Do Kwon.Although Do Kwon remains active on social media and has responded by saying “I am not running away,” no one knows his exact location. It wasn’t until a year later that people learned that Do Kwon had been hiding in Serbia and Montenegro, trying to avoid being caught by the International Criminal Police Organization. On March 23, 2023, Do Kwon, along with Terraform’s chief financial officer Han Chang-joon, attempted to fly from Montenegro’s Podgorica to Dubai using a fake Costa Rican passport. However, they were arrested at the airport by local police. About two hours before Do Kwon’s arrest, a informant informed Montenegro’s top police officer and Interior Minister Filip Adžić that Do Kwon might be in the country. When Adžić told the WSJ about the arrest, he said that the informant had sent him detailed information about Do Kwon’s passport. When he called the border police chief, Do Kwon had already been arrested at the airport. The Interior Minister said during his call with the border police chief, “Do you know who that person is? He’s very famous, and he has a lot of money.” After Do Kwon’s arrest, he was first detained in the pre-trial detention area of Montenegro’s Spuz prison. On June 19, 2023, he was sentenced to four months in prison for using a fake passport. Both South Korea and the United States hoped to get Do Kwon extradited from Montenegro. At the request of US and Korean authorities, the Montenegro’s High Court extended his detention period.

2024年3月，Do Kwon获准离开监狱，但考虑到他仍面临着几个国家提出的刑事指控，黑山高等法院下令没收了他的护照，以防止Do Kwon离境。当时关于Do Kwon的引渡决定仍悬而未决，黑山检察官反对将Do Kwon引渡到韩国，更希望他被送往美国，因为在那里如果他被定罪，可能会面临更长的刑期。

悬念最终在2024年的最后一天揭晓，黑山共和国总理Milojko Spajic当时正式宣布表示，已完成将Do Kwon引渡至美国的手续。

2025年1月2日，Do Kwon首次出现在美国法庭的公众视野中。当日在曼哈顿联邦法院的听证会上，Do Kwon曾拒不认罪，但随着案件后续的推进，Do Kwon已于今年8月就多项罪名指控中的两项罪名(共谋欺诈和电信欺诈)认罪。

最终在12月11日，Paul Engelmayer法官宣读了Do Kwon的服刑命运。

刑期争议

在关于Do Kwon的量刑上，原告检方和被告辩方曾各执一词。

上周四，美国联邦检察官向纽约南区法院法官提交请求，称应判处Do Kwon 12年监禁。

另一边，Do Kwon的辩护团队则请求判处五年监禁，理由是Do Kwon已在黑山服刑，且可能在韩国继续受到起诉。但美国官员辩称，只有长期监禁才能体现欺诈的规模，并能阻止类似行为的发生。

The prosecution argued that only prolonged imprisonment could truly reflect the scale of Do Kwon’s fraud, and could prevent similar acts from occurring in the future. For reference, the losses caused by Terraform’s collapse were even greater than the combined losses suffered by SBF’s FTX, Alex Mashinsky’s Celsius, and OneCoin. SBF will serve 25 years in prison, while Mashinsky has already been sentenced to 12 years for fraud.

Note: In recent years, there have been several cases involving individuals convicted for crimes related to cryptocurrencies

. The prosecution stated in their documents, “The collapse of Terraform triggered a series of crises that affected the cryptocurrency market, indirectly leading to a downturn in the industry. Do Kwon managed to escape from this crisis. During his hiding period, he made vague statements in interviews and tweets, shifting responsibility onto others. When he was captured, he refused to be extradited… Do Kwon’s misconduct, criminal consequences, and his reaction to the exposure of his schemes all justify a severe sentence. In fact, the nature of the crime alone is sufficient to support the imposition of the highest possible penalty.”

Surprisingly, the judge’s final sentence was even heavier than the prosecution’s request for 12 years in prison. Judge Paul Engelmayer said that Do Kwon “choosed to lie” and “made the wrong choices.”

It’s a messy end to an era that has already passed

From SBF to Do Kwon, those names once admired by many are now coming to an abrupt end.

During the previous bull market era, projects like Terra and FTX represented the most aggressive, ambitious, and reckless forces in the crypto world. They accumulated vast amounts of capital and prestige under the guise of technological innovation. However, due to lack of regulation, uncontrolled risks, and human greed, these projects ultimately stumbled into ruin.

But the development of the industry cannot be halted just because some individuals fail. The crypto market has already entered a new cycle. New stablecoin models, new financial primitives, and stricter regulatory requirements are reshaping the underlying structure of the industry. History will remember Terra’s glory, but it will also remember the cost it incurred—a reality and warning that all newcomers must face.