1,194 days after the collapse, the originator of the $40 billion stablecoin was executed.

Author: Sleepy.txt

On August 12, 2025, Do Kwon, dressed in a yellow prison uniform, slowly stood up in a Manhattan federal courtroom in New York City.

Years on the run and incarceration had left his once chubby cheeks thinner, and his hair styled the familiar buzz cut common among inmates. His eyes, once sparkling before the camera, now revealed only fatigue.

This 33-year-old Korean man, once a darling of the crypto world, is now the protagonist of one of the largest financial fraud cases in history.

In the courtroom sketch, Do Kwon lowered his head, his hands clenched. He pleaded guilty, saying, "In 2021, I made false and misleading statements about the reasons for the TerraUSD repeg. What I did was wrong, and I want to apologize for my actions." He now faces years in prison and hefty fines, but that's hardly enough for the hundreds of thousands of investors who lost $40 billion to him. Time is the cruelest judge, changing not only Do Kwon's appearance but also everything he once held. Prosecutor Damian Williams, outside court, called the guilty plea "a significant milestone in the enforcement of cryptocurrency fraud cases." But the word "milestone" rings too cold. It can't reconcile shattered families, comfort the elderly who have lost everything, or save the young who have chosen to end their lives.

From an elite school in Seoul to Stanford, from a skyscraper in Singapore to a dilapidated prison in Montenegro, Do Kwon's life trajectory is like a parabola, rapidly rising, rapidly falling, and finally shattered.

The Birth of a Genius

From Seoul to Silicon Valley

On September 6, 1991, Do Hyeong Kwon cried for the first time in a hospital in Seoul. No one could have predicted that this baby would become one of the most controversial figures in global financial history 30 years later. He was born into a typical middle-class Korean family. His father was an engineer and his mother was a teacher. This combination embodies the worship of knowledge and the desire for success in Korean society. South Korea is a country plagued by profound educational anxiety, where children are thrust into competition from kindergarten. From a young age, Do Kwon displayed an intelligence beyond his years, particularly a gift for mathematics. It seemed as if numbers automatically arranged themselves into the most elegant solutions before him. He attended Daewon Foreign Language High School in Seoul, one of the most elite schools in South Korea. Here, the nation's brightest students gathered, spending the three most crucial years of their lives in this ivory tower. In the memories of his classmates, Do Kwon was always the first to finish his homework, the one most eager to challenge the teacher's opinions. His intelligence was obvious, but even more evident was his confidence. This confidence might have been endearing in the teenage school world, but it also sowed the seeds of tragedy later in life. Even at that age, he already believed he was different and destined for great things. In high school, Do Kwon was like a star gathering energy, waiting to burst forth with dazzling brilliance on a larger stage. And that stage was Stanford, across the ocean. In 2010, 19-year-old Do Kwon boarded a flight to the United States. For a young Korean, attending Stanford University meant a life-changing experience. Located in the heart of Silicon Valley, Stanford is the birthplace of countless tech legends. Computer science courses weren't difficult for Do Kwon; what truly captivated him was the entrepreneurial atmosphere. Here, every student dreamed of becoming the next Steve Jobs or Mark Zuckerberg, and every idea had the potential to become the next world-changing product. Silicon Valley possessed a unique magic: it instilled in young people the belief that technology could solve any problem and that they could revolutionize the world. Do Kwon was deeply captivated by this culture. Bitcoin had just been launched, and the perceptive Do Kwon began delving into blockchain technology, reading Satoshi Nakamoto's white paper and participating in related project development. While his classmates were still anxiously searching for jobs, Do Kwon was already pondering how technology could redefine money itself. He saw the traditional financial system as outdated and inefficient, while blockchain technology represented the future. His time at Stanford shaped Do Kwon's worldview. There, he learned to think technically and see the world through the eyes of an entrepreneur. More importantly, it solidified his conviction: he was destined to change the world. Upon graduating from Stanford in 2015, Do Kwon was no longer the naive teenager from Seoul. He had become a confident young man, a visionary who believed he could create miracles. His resume boasted a bachelor's degree in computer science from Stanford University, and his heart burned with the ambition to change the world. Returning to South Korea, Do Kwon faced a choice: like most of his classmates, pursue a stable and respectable career at a major company like Samsung, or embark on the risky path of entrepreneurship. For a young man nurtured by Stanford's entrepreneurial culture, the answer was obvious. In 2016, at the age of 25, Do Kwon founded Anyfi, his first entrepreneurial venture. He envisioned using blockchain technology to allow users to share their Wi-Fi networks and earn token rewards. He believed that traditional telecom operators were monopolies, and Anyfi could disrupt this through technological means, allowing ordinary people to benefit from network infrastructure. The project garnered some early attention and investment. Do Kwon began appearing frequently at tech events in South Korea, presenting his project and concept. His speeches were passionate, and his vision sounded exciting. Amidst the spotlight, Do Kwon reveled in the aura of entrepreneurial stardom. But reality soon struck him hard. The Anyfi project faced numerous challenges, and the infrastructure at the time was far from mature enough to support such a complex application. The gap between technological ideals and business realities was far greater than Do Kwon had imagined. At the end of 2017, Anyfi failed. For any entrepreneur, this would be an incredibly painful experience. Failure is bitter, forcing one to question one's abilities and rethink one's decisions. But Do Kwon saw it differently. He believed Anyfi's failure was due to poor timing, the market's inability to embrace such a cutting-edge concept, and investors' lack of foresight to support such a project. This mindset is known in psychology as the "self-serving bias," a tendency for people to attribute success to internal factors (such as their own ability) and failure to external factors (such as bad luck). For Do Kwon, this "self-serving bias" not only failed to teach him lessons, but actually strengthened his confidence. He began to turn his attention to the then-emerging field of decentralized finance, particularly stablecoins. He saw this as an opportunity to "redefine money itself" and a chance to leave his mark on history. In January 2018, Singapore welcomed a new company: Terraform Labs. The company's co-founders are Do Kwon and Daniel Shin, two young graduates from top universities, both passionate about blockchain technology and convinced they could change the world. Choosing Singapore as their headquarters was a shrewd decision. This city-state is not only Asia's financial hub, boasting comprehensive financial infrastructure and a global talent pool, but more importantly, it has a relatively open regulatory stance toward blockchain technology. Singapore's encouragement of innovation and streamlined regulations provide an ideal environment for startups like Terraform Labs to grow. Their core concept sounds simple: create an algorithmic stablecoin system that combines the decentralization of Bitcoin with the stability of the US dollar. This system consists of two tokens: TerraUSD (UST), a stablecoin whose goal is to maintain a 1:1 exchange rate with the US dollar; and Luna, a governance token used to maintain system stability. The relationship between the two tokens is like a seesaw: when the price of UST is above $1, the system mints more UST and destroys Luna, thereby increasing the UST supply and depressing its price. When the price of UST is below $1, the system destroys UST and mints Luna, thereby reducing the UST supply and pushing up its price. This mechanism requires no bank deposits or government bonds as a reserve, relying entirely on market forces and algorithms to maintain stability. Do Kwon likened this system to "the digital world's gravitational system," calling it a revolution in monetary history. In his view, traditional stablecoins are like balloons tethered to a string, while UST is like a planet with its own gravity, naturally maintaining a stable orbit. Do Kwon demonstrated exceptional persuasive skills during the fundraising process. He was able to explain complex technical concepts in clear and concise language and paint a grand and alluring vision. More importantly, he was able to convince investors that he was the one who could realize this vision. In August 2018, Terraform Labs completed a $32 million seed round of funding from renowned investors such as Binance Labs, Polychain Capital, and Coinbase Ventures. This investment not only provided financial support but, more importantly, gave the project authoritative endorsement. In April 2019, the Terra blockchain officially launched. This day held special significance for Do Kwon, marking his transformation from a failed entrepreneur to a leader poised to change the world. Simultaneously, Terraform Labs began building an ecosystem around Terra. They launched the Terra Station wallet, allowing users to easily store and transfer Terra tokens. They partnered with Korean e-commerce platforms to allow users to shop with Terra tokens. They also began developing various decentralized applications to increase demand for UST. By the end of 2020, the Terra ecosystem had begun to take shape. UST's market capitalization reached hundreds of millions of dollars, and the price of Luna was steadily rising. More importantly, more and more users began to use Terra's various services. In the cryptocurrency community, Do Kwon was hailed as a pioneer of algorithmic stablecoins, and the Terra project was seen as one of the most promising projects in the DeFi field. In this environment, Do Kwon and his Terra empire continued to expand rapidly, heading towards greater success and deeper abyss. 2021 marked a watershed year for Do Kwon. That year, he launched Anchor Protocol, a lending protocol that promised a 20% annual yield on UST deposits. In the traditional financial world, such a yield is unimaginable; even the most aggressive hedge funds would struggle to consistently deliver such high returns. In Do Kwon's vision, Anchor Protocol is the core engine of the Terra ecosystem. High yields would attract significant capital, increase demand for UST, and drive up Luna's price, creating a positive flywheel. However, this logic has a fatal flaw. A 20% yield requires real economic activity to support it. To maintain this promise, Anchor Protocol requires approximately $6 million in daily subsidies. These subsidies primarily come from the Luna Foundation Guard (LFG), a foundation controlled by Terraform Labs. In other words, Anchor Protocol's high yields were essentially a Ponzi scheme, using new investors' money to pay old investors' returns. But Do Kwon never described it that way. In his speeches, Anchor Protocol was described as "the future of decentralized finance" and "the end of traditional banking." By early 2022, Anchor Protocol's TVL exceeded $14 billion, making it one of the largest DeFi protocols at the time. Investors from around the world flocked to invest their funds. Do Kwon was intoxicated by their enthusiasm and trust. He began to believe that he had truly created a miracle and found the holy grail of finance. At the same time, Do Kwon also launched Mirror Protocol, a synthetic asset platform. In public marketing, the platform was described as "completely decentralized," with no single individual or entity unilaterally controlling the protocol. However, this was not the case. According to a subsequent SEC investigation, Do Kwon secretly maintained control over the Mirror Protocol. He could unilaterally modify protocol parameters, decide which synthetic assets were added or removed, and even halt the entire protocol. An even more serious fraud involved Chai. Beginning in 2019, Do Kwon repeatedly claimed that Chai used the Terra blockchain to process transactions and that its transaction volume reached "billions of dollars." This claim, incorporated into pitch decks and used in media interviews, was presented as crucial evidence that Terra had a practical application. Investors were genuinely persuaded by these figures; after all, while most blockchain projects remain mere concepts, Terra appeared to have real-world applications. According to the SEC's investigation, this claim was also false. Transactions on the Chai platform are actually processed through traditional financial networks and have nothing to do with the Terra chain. Do Kwon and Terraform Labs executives were fully aware of this fact, yet they continued to make misleading statements to investors. This was intentional fraud, but in Do Kwon's view, some "details" could be ignored as long as it could attract more investment and drive up token prices. Pride and Prejudice Success has made Do Kwon extremely arrogant. In July 2021, when British economist Frances Coppola criticized the design flaws of algorithmic stablecoins on Twitter, Do Kwon responded, "I don't debate with poor people. Sorry, I don't have any change to give her right now." This statement was an insult to a scholar and a declaration of war against all skeptics. In his view, wealth equals correctness, and those who criticize him are not right because they are reasonable, but because they are "poor." This statement caused an uproar on social media. Supporters cheered Do Kwon, seeing it as a powerful rebuttal to traditional scholars. Critics, however, said it exposed his true face: a nouveau riche who has been blinded by success. There are many similar controversial remarks. When someone questioned Terra's sustainability, Do Kwon would say, "They're all poor now." When someone worried about the risks of algorithmic stablecoins, he would sarcastically say, "Have fun staying poor." Driven by this mentality, Do Kwon became increasingly isolated. Few around him dared to express dissent, and even if someone did, he would refute them with his wealth and success. This environment further strengthened his arrogance and alienated him from reality. On April 17, 2022, Do Kwon announced the birth of his daughter on Twitter, writing, "Baby Luna, my dearest creation, named after my greatest invention." This statement sparked controversy. Supporters saw it as a reflection of his confidence in the project, while critics saw it as a display of extreme narcissism. It's unusual for a father to name his daughter after his business venture. But even more unusual is his description of the project: "My greatest invention." For Do Kwon, Terra is more than just a business venture; it's a reflection of his personal genius and a legacy he leaves to the world. In April 2022, the Terra ecosystem reached unprecedented heights. UST's market capitalization exceeded $18 billion, Luna's exceeded $40 billion, and the total value of the entire ecosystem approached $60 billion. Do Kwon became a superstar in the crypto world. Major media outlets rushed to cover his story, conferences invited him to give keynote speeches, and investors sought to partner with him. At these events, Do Kwon always wore a carefully tailored suit, an expensive watch, and a confident smile. Beneath the apparent prosperity, risks continued to accumulate. Some astute observers had begun to notice problems. Anonymous researcher FatMan posted a series of analyses on Twitter, pointing out the unsustainability of the Anchor Protocol. Economist Nouriel Roubini warned of fundamental flaws in algorithmic stablecoins. Even some leading figures in the cryptocurrency community have begun to question Terra's long-term prospects. Do Kwon dismissed these criticisms. He saw them as the envy of losers. Such blind confidence would soon cost him dearly. In May 2022, the spring sunshine in Singapore was bright, and Terra's offices were bustling with activity. Employees were preparing for the upcoming launch of new products, and investors were pouring in money. No one realized that an unprecedented financial tsunami was about to strike. Do Kwon leaned back on his office sofa. In his imagination, he was a hero who changed the world, and history would remember him. History would indeed remember him, but not as a hero. The Great Crash May 7, 2022, a seemingly ordinary Saturday, became the day the Terra Empire collapsed. On that day, someone withdrew $375 million in UST from Anchor Protocol. Under normal circumstances, this might have been a mere large transaction, but in the fragile market environment at the time, it became the first stone that triggered the avalanche. UST's price began to fluctuate, falling from its $1 peg. On May 8th, UST fell below the psychologically important $0.99 mark. Facing the crisis, Do Kwon tweeted what now seems like an ironic message: "Deploying more capital - steady lads." But this was just bravado. On May 9th, the situation worsened, with UST falling below $0.95. The Luna Foundation Guard began using its approximately $3 billion in Bitcoin reserves to prop up UST's price, but these reserves were quickly depleted in the face of massive selling pressure. On May 10, the death spiral officially began. UST fell below $0.90, and Luna plummeted from $80 to $30. To maintain UST's price, the system began frantically minting Luna tokens. This mechanism, designed to maintain stability, became a death spiral under extreme market conditions. The falling UST price led to more Luna minting, and the increased Luna supply caused its price to fall further, which in turn led to a loss of market confidence in UST. On May 11, the price of Luna fell to less than $1, and the supply exploded to hundreds of billions. UST plummeted to $0.60, completely losing its peg to the US dollar. On May 12, the Luna supply reached 6.5 trillion, a 6,500-fold increase. On May 13, the Terra blockchain officially halted operations. UST plummeted below $0.10, and the Luna price nearly reached zero. A digital empire once worth $60 billion was destroyed in just six days. Terra's collapse was a disaster. It's estimated that over 280,000 investors worldwide were directly affected, with losses totaling $40 billion. Behind these figures lies the tragedy of countless individuals and families. In South Korea, a retired teacher invested his entire life savings, approximately $300,000, in Luna tokens. She had planned to use the money for medical expenses and retirement, but lost 99% of it after the crash. "I don't know what to do," she told the Wall Street Journal. "I thought it was a safe investment." Even more heartbreakingly, Terra's collapse led to several tragic suicides. In the UK, a 40-year-old investor took his own life after losing his entire savings, leaving behind his wife and two young children. In Taiwan, a university student committed suicide by jumping from a building due to investment failures. His suicide note read, "I have failed my parents' expectations." Many families have been torn apart by failed investments, many have suffered depression due to financial pressure, and many elderly people have lost their retirement security. The entire cryptocurrency market was also severely impacted, with the price of Bitcoin plummeting to an 18-month low. The regulatory response to the incident was swift and severe. The US SEC immediately launched an investigation, and South Korean financial authorities froze the assets of those involved. For investors who lost everything, Do Kwon's attitude was most infuriating. After the crash, he failed to admit his mistakes or apologize to the victims. Instead, he attempted to launch a new token to "compensate" investors, a proposal many viewed as a further insult to the victims. In September 2022, Interpol issued a Red Notice for Do Kwon. Faced with investor anger, media scrutiny, and regulatory investigations, Do Kwon's first reaction was to escape. Later investigations revealed that he had used Bitcoin from the Luna Foundation to support his life on the run. These funds, intended for maintaining the stability of the ecosystem, now became a tool for him to evade legal action. Do Kwon first traveled to Dubai, a city known for its luxury and lax regulations that has provided refuge to many wealthy individuals on the run. However, Dubai did not offer him a sense of security, so he quickly moved to Serbia. In Belgrade, the Serbian capital, Do Kwon settled into an apartment near Knez Mihajlova Street. This street is one of Belgrade's most prosperous areas, making it an unwise choice for an international fugitive to reside there. Do Kwon clearly had difficulty adapting to his new identity. While on the run, Do Kwon established contact with Milojko Spajić, who would later become Montenegro's Prime Minister. Spajić had invested $75,000 in Terraform Labs, an investment worth $90 million at Terra's peak. According to the Wall Street Journal, Spajić invited Do Kwon to visit, and the two chatted for about an hour in a cafe, discussing Do Kwon's ambitions to revive Terra. The meeting was deeply ironic: a politician about to become prime minister and an internationally wanted criminal discussing how to revive a collapsed financial empire. During his more than six months on the run, Do Kwon didn't keep a low profile. He continued to speak out on social media and even appeared on a podcast on November 8, 2022. During the show, he joked with Martin Shkreli, a former hedge fund manager imprisoned for securities fraud. "Prison conditions aren't that bad," Shkreli told him. "They're terrible, but they're not the worst." "Thanks for the heads-up," Do Kwon replied. This nonchalant attitude angered the victims. They felt that Do Kwon, far from taking responsibility for his actions, was enjoying his life on the run, even joking about prison. This behavior further inflamed public hatred against him and bolstered law enforcement's resolve to track him down. In March 2023, Do Kwon crossed the border into Montenegro and settled in the Adriatic resort of Petrovac. He may have chosen Montenegro as a hiding place because of his connection to Spajić or the relatively lax law enforcement environment in that small country. But he had no idea that this decision would be the end of his freedom. On March 23, he took a taxi to the airport in the capital, Podgorica, a journey that usually takes an hour. He paid the driver 4,000 euros, a significant sum for the average Montenegrin. This lavish spending exposed his identity and attracted the attention of locals. In the airport's VIP lounge, Do Kwon handed his passport to an immigration officer. The passport looked legitimate, but it was actually a meticulously crafted forgery, reportedly costing €250,000. The officer swiped it, and an alarm flashed on the screen. According to Montenegrin Interior Minister Filip Adžić, as soon as police detained Do Kwon at the airport, he called the border police chief and told him, "Do you know who that guy is? He's very famous and very rich." Border police searched their luggage and found three laptops, five cell phones, and another set of fake passports from Belgium. According to the interior minister, Do Kwon frustratedly told the police, "Everyone is looking for me." Do Kwon was immediately taken to a detention center and later transferred to Spuz Prison. Located 12 kilometers northwest of Montenegro's capital, Podgorica, the dilapidated prison houses the Balkans' most dangerous criminals. For a wealthy man who once lived in luxury apartments and frequented exclusive venues, it was a living hell. The prison houses members of several feuding mafia gangs accused of murder, bomb-planting, extortion, and running an international drug trafficking ring. Prison authorities try to prevent violence by carefully arranging members of the rival gangs in separate areas of the prison, according to Aleksandra Dubak, legal counsel for the local human rights group Civic Alliance. Do Kwon is being held in solitary confinement in the pretrial detention area. At the beginning of the year, the pretrial detention center held 380 inmates, though its capacity is only 292. In the overcrowded prison, Do Kwon only gets fresh air twice a day. Twice a day, prison guards open his cell and let him stretch out in the yard. On June 16, 2023, Do Kwon defended himself in a Montenegrin court for forging passports. He claimed he believed the passports were legitimate "golden passports," but the judge disagreed and sentenced him to four months in prison. The verdict was a crushing blow to Do Kwon. He realized he was no longer the business tycoon who could solve all problems with his money and influence, but a common criminal who must face justice. Simultaneously, both the United States and South Korea were seeking Do Kwon's extradition, a battle complicated by Montenegro's political corruption. Montenegrin Prime Minister Spajić faces conflict of interest charges stemming from his investment in Terraform Labs. The opposition accuses him of abusing his power to influence the extradition decision to protect his investment interests. Former Justice Minister Milović is also embroiled in a corruption scandal, accused of accepting bribes to influence judicial proceedings. Amidst this complex political landscape, Do Kwon's extradition proceedings were repeatedly delayed. A supposedly straightforward extradition proceeding became a tool in a political struggle, and a financial criminal became a pawn in the political game. After nearly two years of strife, in December 2024, the Montenegrin Supreme Court finally decided to extradite Do Kwon to the United States. On January 2, 2025, Do Kwon was extradited to New York and detained at the Metropolitan Detention Center. This prison, known for its harsh conditions and having housed many high-profile criminals, became increasingly difficult for Do Kwon from Montenegro to New York. US prosecutors possessed a mountain of evidence, including email records, financial documents, and witness testimony. Faced with this overwhelming evidence, continuing to defend himself would only result in a longer sentence. So, Do Kwon's legal team began considering a plea bargain. After months of negotiations, the two sides ultimately reached a plea agreement. On August 12, 2025, Do Kwon, clad in a yellow prison uniform, formally pleaded guilty to two felony charges in a New York federal court. On December 11, 2025, the man who once claimed to "redefine money" will face his final judgment. And the hundreds of thousands of investors who lost money because of him will never see their money back. This is Do Kwon's story: the birth of a genius, the rise of an empire, the shattering of a myth, and the humiliation of a criminal. The most profound weight of this story isn't his own fate, but the weight of those caught up in it, powerless to protect themselves. Their tears will be the heaviest indictment of this era.