There were potentially millions of victims of the $40 billion collapse of Terra’s UST and LUNA, a U.S. judge said during Terraform Labs founder Do Kwon’s sentencing on Thursday. And 315 of those victims submitted letters that detailed suicide, bankruptcy, and health crises that all circle back to Do Kwon’s actions that led to the 2022 downfall of the prominent crypto ecosystem.
U.S. District Judge Paul Engelmayer said he read all 315 letters, according to reporting from Inner City Press, even staying up late and canceling plans to do so—calling the statements “impactful.”
The judge asked Kwon if he’d “read them all” and offered to adjourn the hearing for him to do so, as 30 letters were filed with late notice. Kwon declined, but said he would read them “at the earliest opportunity.”
Do Kwon: A member of my legal team read some of them to me
Judge: They are impactful to me. Mr. Patton, adjourn?
Do Kwon’s Patton: We would like to proceed.
Judge: AUSA Mortazavi has told me about notice, including to the 16,500 who had sought money— Inner City Press (@innercitypress) December 11, 2025
Given the 15-year prison sentence handed down at the end of the hearing, he’ll have plenty of time ahead to catch up. The letters—which are available for the public to read via official court logs—reveal the human impact of Do Kwon’s fraud.
“The collapse of Terra/LUNA had a catastrophic impact on my life and on my family,” an unnamed victim, who claims to have lost $500,000, wrote. “We lost our financial safety net, our retirement plans, and the stability we believed we had earned.”
“Simple things like taking our children on outings, offering them special gifts, or planning any form of vacation are no longer possible,” they added. “We have been pushed to the bottom financially, and every day has become a fight to stay afloat.”
Many of the letters detail losses from the thousands to the millions, with one victim claiming it led them to bankruptcy. The impact of these losses had ripple effects that touched every aspect of their lives, from mental and physical health declines to the shattering of families and relationships.
One victim, Anita Youabian, said that she was diagnosed with a health condition during the collapse, and that the “suffocating stress” of losing $200,000 has significantly worsened her symptoms—to the point where she is in constant pain.
Another victim, Nicholas, claimed that he lost $62,000 that he was earning 20% yield on through the now-infamous Anchor Protocol. This was Terra’s most popular DeFi app, as it offered mouth-watering yield on UST stablecoins—which some viewed as a risk-free investment, at least until the UST stablecoin lost its peg forever. He said that the loss caused a rift in his relationship that ended in divorce, splitting his family apart and ultimately forcing him to live with his parents.
For some, it appears their financial losses were too much to handle.
“My friend and I were very large LUNA investors based on Do’s statements that the peg was restored automatically in 2021,” a victim letter sent via email from Josh Golder reads. “I had a mid-8-figure loss in Luna (yes, that’s correct), and my friend later jumped off a building in Miami after telling his girlfriend (it’s in the police report) that he lost his money in crypto.”
Emotional weight
Ariel Givner, crypto attorney and founder of Givner Law, said that Kwon’s team declining to adjourn the hearing was “almost certainly strategic and not dismissive one bit.” This is because an adjournment could “unintentionally elevate the emotional weight of the letters and shift a procedural hearing into something closer to a victim-impact forum.”
It’s worth noting that not all victims provided statements in the hopes of worsening Kwon’s sentence. Youabian, for example, despite her deteriorating health, proposed that Kwon not go to jail but rather be forced to create a system that would pay all of the victims back—saying that the Terraform Labs founder is “clearly a genius.” Others wanted to see Kwon face the full force of the law and receive a maximum penalty.
Some onlookers speculated online that the judge was offering Kwon the opportunity to show remorse regarding the victims—a hurdle some believe he failed. However, Givner pushed back on this interpretation.
“In my opinion, the judge was not trying to create remorse,” Givner, who previously worked as a judicial clerk, told Decrypt. “When a judge raises the issue of notice or asks the defendant directly whether they wish to proceed, that is about ensuring procedural fairness and creating a clean record, not inviting an apology or emotional response.”
Still, the judge cited the letters in the lead-up to Kwon’s sentencing.
“Victims, I have heard you and your letters,” the judge said, per Inner City Press. “These are a few: ‘My loss was $62,000, I believed it was low risk.’ K writes: ‘I thought of suicide because I advised my father to invest $100,000, his life savings.’ Another wrote, ‘I can’t support children now.’”
“The investors were taking a risk,” the judge continued, “but they were not taking the risk of being a fraud victim.”