Terraform's Do Kwon Sentenced to 15 Years in Prison for Fraud
Do Kwon was sentenced to 15 years in federal prison by U.S. District Judge Paul Engelmeyer in New York for conspiracy and wire fraud related to Terraform Labs and the TerraUSD (UST) stablecoin.
Kwon pleaded guilty in August to one count of conspiring to commit commodities fraud, securities fraud, and wire fraud, and one count of wire fraud, admitting he knowingly defrauded TerraUSD purchasers.
The Terra collapse in May 2022 wiped about $50 billion from the crypto ecosystem and precipitated a cascade of liquidations, including the FTX collapse.
The sentence is slightly above the 12-year term prosecutors sought; the plea allowed a maximum 25-year term for two counts, but the court imposed 15 years.
Kwon must serve at least half the sentence before he can apply for an international transfer back to South Korea, where he faces further charges; U.S. prosecutors and Korean authorities discussed the status of such charges.
Prosecutors said they had no information about South Korean charges, while Korean authorities said they could not disclose their intended punishment; the Bureau of Prisons will credit Montenegrin custody time beyond the four months previously served for passport fraud, though the exact credit is undetermined.
Victims testified in court about how Terra's collapse affected them or their families during the sentencing hearing.
Kwon is a South Korean national who spent about 17 months in Montenegrin custody before his extradition to the United States in January.
