Do Kwon Sentenced to 15 Years in US Federal Prison for Cryptocurrency Fraud
Do Kwon, co-founder of Singapore-based Terraform Labs, has been sentenced to 15 years in federal prison in New York after pleading guilty to two US charges: conspiracy to defraud and wire fraud. The sentence, handed down by US District Judge Paul Engelmayer, exceeds prosecutors' initial 12-year request. The judge described the case as a "fraud of epic generational scale."
Kwon was responsible for developing the cryptocurrencies TerraUSD (UST) and Luna, whose collapse erased approximately $40 billion and greatly contributed to the 2022 cryptocurrency downturn. He was extradited to the US from Montenegro, where he had been jailed for using a fake passport, and has remained in US custody since his extradition.
As part of his plea agreement, Kwon agreed to forfeit $19.3 million along with several properties. Prosecutors stated that they would support Kwon serving the second half of his sentence in South Korea if certain terms are met. However, they will not seek restitution for investors due to the difficulty in determining the specific losses, which total about $40 billion.
Judge Engelmayer acknowledged letters from 315 victims around the world, some of whom remain supportive of Kwon despite reporting severe personal losses. Kwon’s legal defense had requested a sentence of up to five years, arguing that his actions were intended to support TerraUSD rather than for personal gain. The judge, however, deemed that request wildly unreasonable.
