Do Kwon sentenced to 15 years, LUNA surges 222%! Speculation or a turnaround?

Terraform Labs co-founder Do Kwon admits to telecom fraud and conspiracy to commit fraud, and has been sentenced to 15 years in federal prison in the Southern District of New York. The 2022 Terra crash led to approximately $40 billion in market capitalization evaporating, but LUNA’s price has surged by 222% since early December, mainly due to the v2.18 upgrade. Technical indicators suggest that breaking through the Fibonacci range could push the price up to $2.

Do Kwon Pleads Guilty and Sentencing: The Cost of a $40 Billion Scam

(Source: X)

Before the sentencing, Do Kwon stated: “I want everyone to know, I have been thinking about what I could have done. The car accident happened four years ago, and I haven’t seen my family in three years. I want to atone in my homeland.” However, Judge Engelmayer was not convinced, telling Do Kwon: “You have been poisoned by cryptocurrency, and I believe that hasn’t changed. You are certainly incapacitated from acting. If you had not pleaded guilty, my sentence would be harsher.”

Judge Engelmayer noted that the US prosecutors’ recommendation of 12 years was “unreasonable” (too lenient), while Do Kwon’s lawyer requested 5 years, calling it “completely unreasonable and requiring an appeal to overturn” (absurd). Ultimately, the 15-year sentence reflects the court’s assessment of the severity of the fraud. He will have credit for time served in the US and the 17 months of pre-judgment detention before extradition. After serving approximately seven and a half years, he may be extradited back to South Korea, where he faces a maximum of 40 years imprisonment.

During the sentencing hearing, several victims delivered statements. According to charges in Terraform’s ongoing bankruptcy case, about 16,500 people were harmed by the company’s collapse, with six victims permitted to testify via phone. One victim, Tatyana Donsova, said: “I sold my apartment in Moscow and invested in Do Kwon. $81,000 turned into just $13 in an instant. He has no sense of responsibility toward investors. I am now officially homeless.” These testimonies reveal the devastating impact of Terra’s collapse on ordinary investors.

Do Kwon’s sentencing sets an important precedent for cryptocurrency fraud cases. Former FTX CEO Sam Bankman-Fried was sentenced to 25 years, Binance former CEO Zhao Changpeng served four months (later pardoned by Trump), and Celsius former CEO Alex Mashinsky received 12 years. Kwon’s 15-year sentence falls in the middle, indicating that courts are establishing sentencing standards for crypto fraud. These cases send a clear message to the industry: fraudulent conduct will face severe criminal consequences.

LUNA v2.18 Upgrade: Can Technical Reforms Wash Away the Shame?

However, market reactions have been surprising, with LUNA’s price soaring 222% since early December, sparking speculation about its revival. The fundamental catalyst for this rebound is the December 8 release of the LUNA v2.18 upgrade, which introduced stronger security features, tighter Cosmos interoperability, and enhanced connectivity between LUNA and the Cosmos ecosystem.

The core improvements in the v2.18 upgrade include enhanced smart contract security audits, optimized validator reward structures, and deep integration with Cosmos IBC (Inter-Blockchain Communication Protocol). These changes directly address some of the technical issues that led to the 2022 collapse. Whether the upgrade can truly restore market confidence remains uncertain. Since the crash, investors have generally lost hope in LUNA, and trust in the brand has been thoroughly destroyed.

Three Key Improvements in LUNA v2.18 Upgrade

Enhanced Security: Introduction of multi-layer smart contract auditing and emergency pause functions to prevent systemic risks like UST de-pegging

Cosmos Interoperability: Deep integration with IBC protocol, enabling seamless interaction between LUNA and other chains in the Cosmos ecosystem

Validator Incentive Optimization: Improved staking reward structure to attract more validators to participate in network security

Today, Do Kwon’s trial has drawn public attention, and news reports surrounding the potential verdict have once again shifted focus to this cryptocurrency. The phenomenon of “negative news attracting attention” is not uncommon in the crypto market. When a long-dormant project makes headlines again, whether the news is positive or negative, it tends to attract speculative capital inflows. Many traders see Do Kwon’s sentencing as a symbol of “turning the page,” believing that legal accountability has been pursued and that LUNA can now move forward with a fresh start.

Technical Analysis: Speculative Rebound or Trend Reversal?

(Source: Trading View)

This rebound has solidified the lower boundary of the three-year downward channel, which has proven to be an effective starting point for LUNA’s consolidation after the crash. Technical indicators suggest that LUNA is testing the possibility of breaking out of its long-term downtrend. The RSI is currently at 63, not yet overbought (above 70), while the MACD shows a bullish crossover with expanding gap, reinforcing a bullish stance.

Key breakout levels are near the previous demand zone, between $0.357 and $0.382, based on Fibonacci retracement levels. If this zone becomes support, it could trigger a rally of up to 1000%, with a target of $2. The intermediate retracement zone at $0.246 to $0.236 remains a resistance level, limiting today’s gains.

However, many market participants attribute this rally to short-term speculative capital rather than fundamental improvement, casting doubt on the longevity of this upward trend. The sudden surge in momentum indicators may signal a speculative-driven rally rather than a long-term one, opening the door to downward volatility. If long-term holders decide to take profits, weak investors may start selling, potentially causing a 70% drop in price, retesting support at $0.0665.

For LUNA investors, the current dilemma is clear. On one hand, the technical upgrades and Do Kwon’s sentencing offer a “fresh start” narrative; RSI and MACD also show that upward momentum has not yet exhausted. On the other hand, the trust in the LUNA brand has been thoroughly destroyed, with the $40 billion crash still fresh in memory. Rational investors should stay highly cautious. Trading LUNA should be regarded as purely speculative; only invest funds you can afford to lose entirely, and set strict stop-loss and take-profit levels. Do Kwon’s 15-year sentence reminds us that fraud in the crypto market will ultimately be punished, and projects involved in such scams—even with technical upgrades—will find it hard to completely escape their dark past.