Terra/Luna
Summary
Terra was a blockchain protocol developed by Terraform Labs that operated an algorithmic stablecoin (TerraUSD/UST) pegged to the US dollar via a mint-and-burn mechanism with its native token LUNA. In May 2022, UST lost its dollar peg and entered a catastrophic death spiral that wiped out approximately $40-45 billion in market capitalization within days, triggering cascading bankruptcies across the crypto industry. Founder Do Kwon was subsequently charged with fraud by the SEC and DOJ, found liable at trial, and sentenced to 15 years in federal prison in December 2025 — with Terraform Labs agreeing to a $4.47 billion SEC settlement, the largest in SEC crypto enforcement history at the time.
Connected Entities
8 entities · 2 linked investigations- + 32 more
Connected Through
5 shared actors · 2 investigationsDistinct actors this investigation shares with others — holders, traders, and named parties. Shared infrastructure (exchanges, pools) is excluded.
Timeline(30 events)
2018-01-01
Do Kwon and Daniel Shin co-found Terraform Labs in Singapore.
2019-01-01
Terra blockchain launches with the LUNA token.
2020-09-01
Anchor Protocol launches, offering approximately 19.5% APY on UST deposits.
2021-05-01
UST briefly loses its peg; Do Kwon allegedly arranges secret HFT firm purchases to artificially restore the peg rather than letting the algorithm work, then publicly misrepresents the recovery as algorithmic.
2021-07-01
Terraform Labs injects $70 million into Anchor's yield reserve to prevent depletion.
2022-01-20
Luna Foundation Guard established; begins accumulating Bitcoin reserves as a UST peg backstop.
2022-02-18
Terraform Labs injects $470 million into Anchor's yield reserve — a second emergency bailout indicating structural insolvency of the yield model.
2022-04-01
LUNA reaches an all-time high of approximately $119.51. UST market cap approximately $18 billion. Anchor TVL peaks at $17.15 billion.
2022-05-05
LUNA trading at approximately $87; UST at $1.
2022-05-07
Two large wallet addresses withdraw approximately 375 million UST from Anchor; large UST sales on Curve begin pushing UST below $1.
2022-05-09
UST loses dollar peg for second time in 48 hours. LFG announces $1.5 billion BTC/UST deployment to defend peg. Do Kwon tweets 'Deploying more capital — steady lads.'
2022-05-10
LFG deploys final Bitcoin reserves — approximately 33,206 BTC exchanged for ~1.16 billion UST. Peg defense fails.
2022-05-13
LUNA supply exceeds 6.5 trillion tokens. LUNA price falls below $0.00005. UST trades at approximately $0.10-$0.20. Terra blockchain halted. Combined market cap loss approximately $40-45 billion.
2022-05-16
LFG discloses remaining reserves of 313 BTC from original 80,394 BTC.
2022-05-25
Terra community approves Terra Ecosystem Revival Plan 2 (Terra 2.0 fork) with 65% validator approval.
2022-05-28
Terra 2.0 blockchain launches with new LUNA token airdrop. Original chain rebranded Terra Classic (LUNC).
2022-06-27
Three Arrows Capital defaults on loan payments to Celsius and Voyager, triggering cascading bankruptcies.
2022-07-01
Celsius Network and Voyager Digital both file for Chapter 11 bankruptcy.
2022-09-14
South Korean prosecutors issue arrest warrant for Do Kwon.
2022-12-12
CoinDesk reports Do Kwon is believed to be in Serbia.
2023-02-16
SEC files fraud charges against Terraform Labs and Do Kwon in the Southern District of New York.
2023-03-23
Do Kwon and CFO Han Chang-joon arrested at Podgorica Airport, Montenegro, in possession of fake Costa Rican passports.
2023-04-26
South Korean prosecutors indict Daniel Shin on fraud-related charges.
2024-01-21
Terraform Labs files for Chapter 11 bankruptcy in Delaware.
2024-04-05
New York jury unanimously finds Terraform Labs and Do Kwon liable for securities fraud across all counts after less than two hours of deliberation.
2024-06-12
Terraform Labs and Do Kwon agree to $4.47 billion SEC settlement — largest SEC crypto enforcement settlement at the time.
2024-09-19
US bankruptcy court approves Terraform Labs wind-down plan.
2024-12-27
Montenegro Justice Minister approves Do Kwon's extradition to the United States.
2025-08-12
Do Kwon pleads guilty to two federal fraud charges; agrees to forfeit $19 million.
2025-12-11
Judge Paul A. Engelmayer sentences Do Kwon to 15 years in federal prison, calling the scheme 'a fraud on an epic, generational scale.'
Decision Log
- hash: FFua9tniBiP1CLAKBCKQKdcaXEER1mhXZ2W1ckuXdDXS
- hash: G2UZ8MSTW97JCQfk1LZUEbdREZcKuDmMCDK8ojLZ9c5h
- hash: CLXsYzSL8DmBZxgdhytUjfdg29mDWuwoPcokncz2VB9p
This investigation is cryptographically anchored to the Solana blockchain and source URLs are archived via the Internet Archive.
model: claude-code-investigator
generated: 5/7/2026, 8:45:16 AM
last updated: 5/30/2026, 1:03:53 PM
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