Future Trader Analyst

Terra News: Do Kwon Sentenced to 15 Years; LUNA & LUNC Rally on Volatility
December 12, 2025
The Terra ecosystem has returned to the global spotlight this week following the conclusion of one of the most high-profile legal sagas in crypto history. Do Kwon, the co-founder of Terraform Labs, has been sentenced to 15 years in prison, a verdict that has triggered massive volatility and speculative rallies for both Terra (LUNA) and Terra Classic (LUNC).
Headlines
Do Kwon Sentenced: A U.S. federal judge sentenced Kwon to 15 years for fraud, exceeding the 12 years prosecutors initially requested.
LUNA Surges: The token rallied over 100% this week, driven by speculative trading and a successful network upgrade.
LUNC Burns Intensify: Terra Classic (LUNC) saw a supply shock-driven rally of nearly 125%, fueled by massive token burns and spillover sentiment.
The Verdict: 15 Years for a $40 Billion Collapse
On Thursday, December 11, U.S. District Judge Paul Engelmayer sentenced Do Kwon to 15 years in prison for his role in the 2022 collapse of the Terra ecosystem, which wiped out an estimated $40 billion in investor value.
The Sentence: The 15-year term is steeper than the 12 years recommended by prosecutors. The defense had argued for a maximum of five years.
Financial Penalty: Kwon was also ordered to forfeit $19 million in ill-gotten gains.
Judge’s Remarks: Judge Engelmayer reportedly described the fraud as "colossal" and noted that Kwon had repeatedly lied to investors about the stability of the TerraUSD (UST) algorithmic stablecoin.
This sentencing effectively closes the U.S. chapter of the legal battle, though Kwon still faces potential legal challenges in South Korea.
Market Reaction: A Speculative Firestorm
Contrary to the "sell the news" expectation, the sentencing week triggered a massive speculative frenzy for Terra ecosystem tokens.
Terra (LUNA)
LUNA, the token of the new chain (Terra 2.0), became one of the week's top performers.
Price Action: LUNA surged from approximately $0.07 to nearly $0.20 earlier in the week, marking a gain of over 100%.
Drivers: The rally was fueled by the successful v2.18 mainnet upgrade on December 8, which fixed critical bugs and improved network stability. Traders also speculated that the "closure" provided by the sentencing might remove the uncertainty that has suppressed the token's price for years.
Terra Classic (LUNC)
The original chain, Terra Classic, also saw explosive growth.
Price Action: LUNC rallied aggressively, climbing from $0.000028 to highs near $0.00008, before retracing to the $0.00006 range.
Supply Shock: The rally was largely attributed to a "supply shock" dynamic. Over 1.5 billion LUNC were burned in the last week alone, with Binance continuing to support the monthly burn mechanism. This reduction in supply, coupled with a 750% spike in volume, created a parabolic move.#LUNAUpdate #LUNA #LUNC
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