Do Kwon Receives 15-Year Prison Term in US Court
Do Kwon, Terraform Labs co-founder, was sentenced to 15 years in prison on Thursday after an implosion in the Terra ecosystem caused an erosion of $40 billion from the cryptocurrency market last year.
The co-founder was sentenced by Judge Paul Engelmayer of the US District Court for the Southern District of New York for wire fraud and conspiracy to defraud. Kwon pleaded guilty to fraud in a US court and will receive credit for time already served, including 17 months in pre-extradition custody. He may also serve part of his sentence in South Korea.
Court Highlights Severity of Kwon’s Fraud
Judge Engelmayer emphasized the gravity and deception of Kwon’s actions during sentencing:
“Your fraud was unusually serious. For four years, your public representation has been false. The investors were taking a risk, caveat emptor. But they weren’t going to take the chance of falling victim to fraud… What you did that made it so despicable was exploit the trust.”
The US District Attorney’s Office for the Southern District of New York warned the crypto community:
“To the next Do Kwon, if you commit fraud, you’ll lose your liberty for a very long time, as you will here… You will be incapacitated.”
The judge rejected the US prosecutors’ recommendation of 12 years as “unreasonable” and Kwon’s defense request of five years as “implausible,” ultimately settling on a 15-year sentence.
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Victims Speak Out During Sentencing
Bankruptcy claims reveal that approximately 16,500 victims were affected by the Terraform collapse. Six victims testified in court, sharing devastating personal stories:
Tatiana Dontsova recounted losing almost all of her life savings:
“I sold my apartment in Moscow so I could invest with Do Kwon. $81,000 became $13 in my hand. I am now officially homeless.”
The testimonies highlighted how Kwon exploited investor trust with catastrophic financial consequences.
Extradited to South Korea and Potential Additional Sentencing
Kwon may return to South Korea after serving seven and a half years in the US. South Korean authorities are pursuing separate charges that could add up to 40 more years in prison.
Kwon Joins the Ranks of High-Profile Crypto Convictions
Do Kwon becomes the latest high-profile crypto executive sentenced in landmark legal cases:
- Sam Bankman-Fried – former FTX CEO, 25-year sentence
- Alex Mashinsky – former Celsius Network CEO, 12-year sentence
- Changpeng Zhao, former Binance CEO, imprisoned four months, later pardoned by Donald Trump
After legal challenges in Montenegro, Kwon was extradited to the US in December 2024. The sentencing underscores the US crackdown on crypto fraud.
A Clear Warning for Crypto Scammers
A 15-year prison sentence serves as a stern reminder to the crypto industry about the dangers of abusing investor trust. Kwon’s conviction reflects the United States’ commitment to holding cryptocurrency executives accountable for market fraud.
