Do Kwon: The Man Who Vaporized $40 Billion

$40 billion evaporated in 72 hours. He was on the run for a year.

Do Kwon, founder of Terraform Labs

Do Kwon was the loudest man in crypto. He mocked critics on Twitter, called skeptics "poor," and bet his entire reputation on an algorithmic stablecoin called UST that he said was mathematically impossible to fail.

UST was designed to hold its $1 peg through a balancing mechanism with LUNA. When UST demand fell, LUNA would be burned. When UST demand rose, LUNA would be minted. It was elegant on paper. In practice, it was a time bomb with a countdown nobody could see.

In May 2022, a large sell-off of UST broke the peg. The algorithmic mechanism kicked in and started minting LUNA to restore it. But the more LUNA was minted, the lower its price fell. The lower LUNA fell, the more had to be minted. A death spiral. In 72 hours, LUNA went from $80 to fractions of a cent. $40 billion in market value turned to zero.

People lost everything. Retirement savings. College funds. At least a handful of suicides were linked to the collapse. Crypto Twitter became a rolling wave of grief, rage, and disbelief.

Kwon initially showed zero remorse. He tweeted about building a "LUNA 2.0" days after people lost their life savings. When Interpol issued a red notice, he fled South Korea. He was eventually caught in Montenegro in March 2023, carrying fake Costa Rican passports.

After a tangled extradition fight between South Korea and the U.S., Kwon was extradited to the United States in January 2025. He pleaded guilty. On December 11, 2025, a federal judge sentenced him to 15 years in prison and ordered over $19 million in forfeiture. Terraform Labs had already settled with the SEC for $4.47 billion in June 2024 and agreed to wind down permanently.

The man who told critics to "have fun staying poor" will spend the next 15 years in a cell.