Do Kwon, the co-founder of Terraform Labs, was sentenced Wednesday to 15 years in federal prison for orchestrating one of the largest frauds in crypto history, culminating in the $50 billion collapse of the TerraUSD (UST) ecosystem in May 2022, a report by CoinDesk said.
U.S. District Judge Paul Engelmeyer of the Southern District of New York handed down the sentence, exceeding the 12 years sought by prosecutors and far surpassing the five-year term requested by Kwon’s defense team. Kwon, 33, must serve at least half the term before applying for a prison transfer to South Korea, where he also faces charges.
The sentencing followed an emotional hearing featuring testimony from victims around the world who described how Terra’s implosion upended their lives. Judge Engelmeyer cited the “eye-popping” scale of the fraud, Kwon’s attempts to flee using false passports, and his deceptive public messaging during UST’s final collapse — advising investors to stay put while insiders exited — calling the conduct “despicable.”
Kwon’s online persona also drew the judge’s ire. Engelmeyer pointed to a social media post in which Kwon mocked a critic, saying such comments revealed “who you truly are.”
Prosecutors said Kwon masterminded schemes to mislead investors, inflate Terraform tokens and, after the collapse, launder funds and seek political protection abroad. Kwon pleaded guilty in August to conspiring to commit commodities, securities and wire fraud, and to a separate wire fraud charge, reducing a possible 135-year sentence under a nine-count indictment.
During the hearing, a tearful Kwon accepted responsibility and asked to one day serve his sentence closer to his wife and young daughter in South Korea. The judge expressed sympathy for the child but emphasized the devastation suffered by thousands of victims.
Kwon’s case marked the first major domino in the 2022 crypto crisis, which later engulfed FTX and other major firms, leading to several high-profile convictions across the industry.
