Do Kwon and co-founder Daniel Shin started Terraform Labs in Seoul in 2018 to build TerraUSD, an algorithmic stablecoin meant to hold $1 through code alone rather than dollars in a bank. A burn and mint mechanism tied it to a second token, Luna, with arbitrage traders paid to keep the two in balance. Backers including Coinbase Ventures, Galaxy Digital and Lightspeed put in over $200 million, and the Anchor protocol drew deposits with a 19.45% yield that Terraform subsidized from its own reserves. Kwon expanded his stake to 91.7% of the company, sued the SEC over a subpoena tied to Mirror Protocol, and paid $38.15 million to sponsor the Washington Nationals.

In January 2022 Kwon set up the Luna Foundation Guard in Singapore, which built up more than 80,000 Bitcoin as a backstop. After he filed to dissolve Terraform’s Korean entity and reportedly sent about $7 million to the law firm Kim & Chang, withdrawals began on May 9, 2022. The peg broke, the system minted trillions of Luna, the Bitcoin reserve was spent, and the chain was halted by May 13 after nearly $45 billion in value vanished. Kwon launched Terra 2.0, denied running a Ponzi scheme, and became the subject of an Interpol red notice before his March 2023 arrest in Montenegro. He pleaded guilty to two fraud charges in August 2025 and was sentenced to 15 years in December 2025.

• Kwon was stopped at the airport in Podgorica holding a forged Costa Rican passport, with a fake Belgian one in his bag.
• The Terra Club behind home plate at the Nationals’ ballpark came from a five-year, $38.15 million deal.
• As Luna’s price fell toward a penny, the protocol had to print about 100 Luna to redeem a single TerraUSD.
• Terraform Labs filed for Chapter 11 protection in the United States on January 21, 2024.
• Jump Trading paid $123 million in December 2024 to settle SEC claims, and in February 2026 the bankruptcy estate sued Jane Street over alleged insider trading.