LUNA Drops 5.3% as Co-Founder Do Kwon Sentenced on Fraud Charges

LUNA experienced a 5.3% decline within 24 hours on December 11, 2025, closing at $0.19, despite posting strong gains of 39.04% over the past week. Over the last month, the token rose by 157.48%, reflecting a sharp turnaround after a 55.17% drop in the previous year. The recent price action coincides with the sentencing of Terraform Labs co-founder Do Kwon in a Manhattan federal court, marking a pivotal moment for the Terra ecosystem.

Do Kwon, who previously pleaded guilty to conspiracy to commit fraud and telecommunications fraud, faces a 12-year prison sentence as requested by prosecutors. The case, presided over by Judge Paul Engelmayer in the Southern District of New York, has drawn significant attention due to its implications for the broader cryptocurrency industry. Kwon’s earlier refusal to plead guilty to a nine-count indictment—including charges of securities fraud, commodities fraud, and money laundering—highlighted the legal and regulatory complexities surrounding digital asset projects.

The sentencing hearing underscores a broader regulatory shift toward stricter enforcement in the crypto space. Authorities have increasingly focused on investor protection and corporate accountability, with this case setting a precedent for how courts may handle similar cases in the future. Analysts suggest that Kwon’s sentencing could influence market sentiment and investor confidence, particularly for projects operating in jurisdictions with evolving regulatory frameworks.

The recent legal developments have contributed to heightened volatility in LUNA’s price. The token’s surge over the past week was partly attributed to the December 7 network upgrade, v2.18, which improved node performance and resolved memory-related issues. The upgrade was seen as a key milestone in the ongoing efforts to stabilize and improve the Terra 2.0 chain. However, the uncertainty surrounding Kwon’s sentencing has introduced a new layer of risk, with traders positioning ahead of the verdict and some anticipating a potential market reversal depending on the outcome.

Despite the price decline in the last 24 hours, LUNA’s broader upward trend indicates continued interest in the project. The token’s performance has been supported by technical developments, including improved Cosmos interoperability and enhanced security measures. These upgrades have provided a foundational boost, although they remain subject to the unpredictable influence of external events such as legal rulings.

As the market reacts to the legal proceedings, investors are closely watching for signs of stability or further turbulence. While some see the sentencing as a resolution that could clear the way for long-term recovery, others remain cautious about the potential for regulatory crackdowns or reputational damage. The outcome of Kwon’s case is expected to have lasting implications for Terra’s roadmap, investor trust, and the broader narrative around crypto regulation.