Morning Minute: Do Kwon Gets 15 Years for $40B Terra Luna Fraud

Morning Minute is simply a regular newsletter written by Tyler Warner. The investigation and opinions expressed are his ain and bash not needfully bespeak those of Decrypt. Subscribe to the Morning Minute on Substack.

GM!

Today’s apical news:

• Crypto majors rebound aft caller selloff; BTC backmost to $92k, SOL leads

• Solana announced the motorboat of Firedancer unrecorded connected mainnet

• YouTube announced creator payments successful stablecoins

• The DTCC has been cleared to connection tokenization services by the SEC

• Coinbase is reportedly launching prediction markets & tokenization adjacent week

Nearly 3 years aft Terra’s $40B vaporization, a U.S. justice yet handed down the verdict.

Do Kwon is going distant for 15 years.

A U.S. court sentenced Terraform Labs founder Do Kwon to 15 years successful national prison, capping a multiyear saga that included a planetary manhunt, aggregate extradition attempts—and 1 of the largest wealthiness destructions successful crypto history.

The justice highlighted the “eye-popping” harm caused by Terra’s collapse, an lawsuit that wiped retired billions successful retail savings, destabilized large funds, and triggered a cascading recognition unwind crossed lenders and marketplace makers.

Hundreds of victims submitted statements describing fiscal ruin, breached trust, and lasting intelligence wellness fallout.

Do Kwon Sentenced to 15 Years successful Prison Over $40 Billion Terra Crypto Collapse

Prosecutors argued Kwon had misled investors astir reserves backing UST and misrepresented the stableness of the algorithmic design.

In the end, the tribunal sided with a mid-range sentence: significant, but notably beneath the 40+ years prosecutors wanted.

Terraform Labs remains successful bankruptcy, and civilian penalties from the SEC lawsuit are inactive playing out.

“The blasted should beryllium pointed astatine me. I failed to run the strategy successful the close way. I privation to forestall different crypto founders from lasting wherever I americium close now.” - Do Kwon

This was 1 of crypto’s biggest achromatic swan events and the spark that lit the fuse for 2022 carnivore marketplace selloff.

After the particulate had settled, Terra had fallen from an ATH implicit $100 to beneath $0.50.

Massive wealthiness destruction.

And Do Kwon and his bravado intelligibly played a cardinal relation successful that destruction.

Crypto has learned immoderate lessons from Terra Luna, namely—no much algorithmic stablecoins.

But 15 years won’t heal the wounds of those the astir impacted successful the Terra Luna devastation.

And present we are successful precocious 2025, conscionable 3 years later, and immoderate are repeating the mistakes of the past (namely, being excessively concentrated connected perps exchanges and excessively leveraged up).