LUNA -0.52% in 24 hours as Founder Faces Legal Challenges in U.S. and South Korea

On DEC 16, 2025, LUNA declined by 0.52% within 24 hours to $0.1309. Over the past seven days, the cryptocurrency fell by 23.6%, but it surged by 88.78% in the last month and dropped by 67.13% in the past year. The recent price action follows significant legal developments concerning Do Kwon, the founder of the Terra (LUNA) ecosystem.

Legal Repercussions for Do Kwon

Do Kwon, the mastermind behind the TerraUSD (UST) and LUNA tokens, was recently sentenced to 15 years in a U.S. federal court. The ruling followed a conviction on nine counts, including fraud and money laundering, stemming from the collapse of the Terra ecosystem in May 2022. U.S. prosecutors noted that Terraform Labs had covertly manipulated market prices to prop up the value of UST, which was falsely marketed as being pegged to the U.S. dollar. The collapse triggered a cascading failure across the crypto market, with estimated global losses exceeding $40 billion.

As part of the sentence, Judge Paul Engelmayer of the Southern District of New York ordered the confiscation of $19 million in illicit gains. A total of 315 victim impact statements were submitted during the trial, many highlighting severe personal and financial consequences, including bankruptcies, health issues, and even suicides.

South Korean Prosecution Moves Forward

Despite the U.S. sentencing, Kwon is expected to face additional legal action in South Korea, where he is accused of violating the Capital Markets Act. South Korean prosecutors are pursuing a separate criminal trial, which could add over 30 years to his sentence. The charges stem from the 2022 collapse, which affected approximately 200,000 local investors who collectively lost around $204 million.

The Seoul Southern District Prosecutors’ Office issued an arrest warrant for Kwon in September 2022, and he was extradited to the U.S. in December 2023 after being detained in Montenegro. According to legal experts, Kwon could request extradition back to South Korea after serving half of his U.S. sentence under the International Prisoner Transfer Program, with U.S. authorities expected to have no objections.

Implications for the Cryptocurrency Industry

The dual legal cases against Kwon reflect an increasing global effort to hold crypto executives accountable for systemic failures. Analysts note that Kwon’s prosecution could set a precedent for future cases involving algorithmic stablecoins and other high-risk financial instruments.

David Sehyeon Baek, a cybercrime consultant, commented on the broader implications. He argued that South Korea’s legal system has historically treated large-scale financial crimes as business failures, often resulting in insufficient penalties. The U.S. conviction, by contrast, has been perceived as more punitive and aligned with public demands for accountability.

Kwon’s actions, according to prosecutors, were well aware of the risks involved. The artificial inflation of UST’s value and the failure to maintain the dollar peg were deliberate, and yet the system was allowed to continue despite the evident dangers.

Legal and Regulatory Outlook

The case underscores the need for clearer international regulations, particularly concerning stablecoins and their mechanisms. The U.S. and South Korean cases are being closely watched by regulatory bodies worldwide as they consider how to better safeguard investors from similar incidents.

The sentencing in the U.S. is a significant step toward addressing the fallout from the Terra collapse. However, South Korean authorities remain focused on ensuring that victims receive adequate restitution and that the legal system reflects the true scale of the damage caused.

As Kwon awaits the possibility of extradition and additional legal proceedings, the cryptocurrency market remains cautious. The Terra collapse was one of the most impactful events in crypto history, and the ongoing legal scrutiny of its founder may yet have broader implications for the future of algorithmic stablecoins and the regulatory landscape.