Judge Paul Engelmayer condemned Kwon’s years-long deception and pointed out the devastating impact on more than 16,500 victims, including investors who lost their life savings. Kwon was openly remorseful and expressed a desire to serve part of his sentence in South Korea, where he could face additional charges and potentially decades more prison time.
Do Kwon Sentenced to 15 Years
Do Kwon, the co-founder of Terraform Labs, was sentenced to 15 years in a US federal prison after pleading guilty to wire fraud and conspiracy to defraud for his role in the catastrophic collapse of the Terra ecosystem. The 2022 implosion wiped out roughly $40 billion in market value and left thousands of investors financially devastated.
During the sentencing hearing in the Southern District of New York, Judge Paul Engelmayer delivered a sharply worded rebuke of Kwon’s actions, and placed a lot of emphasis on the fact that the severity and duration of his deception required a substantial prison term. Kwon will receive credit for time served in the United States as well as 17 months spent in custody in Montenegro prior to extradition.
Live court reporting from Inner City Press (Source: Bluesky)
Before the judge issued his decision, he heard from several victims who described in detail how Terra’s collapse upended their lives. Prosecutors said more than 16,500 people filed claims in Terraform’s bankruptcy proceedings.
One victim, Tatiana Dontsova, recounted how she sold her apartment in Moscow and relocated to Tbilisi after investing in what she believed was a promising ecosystem. Her $81,000 investment collapsed to just $13, which left her homeless and without recourse. The judge mentioned these stories while pointing out that investor risk does not equate to accepting the possibility of fraud, and called Kwon’s conduct “unusually serious” and rooted in exploiting public trust.
Do Kwon
Kwon addressed the court by saying he spent years reflecting on the collapse and expressed a desire to serve his punishment in South Korea, where he has been separated from his family for three years. Engelmayer acknowledged his remorse but warned that leniency was not appropriate. He stated that without the guilty plea, the sentence would have been even harsher.
Live court reporting from Inner City Press (Source: Bluesky)
The judge also dismissed both sides’ suggestions for shorter sentencing ranges, and found the prosecution’s recommended 12 years “unreasonable.” Under the terms of his sentence, Kwon may be extradited to South Korea after serving half of his US term, where he could face up to an additional 40 years in prison.
His conviction is yet another major chapter in the legal reckoning facing high-profile crypto executives. Sam Bankman-Fried is currently serving a 25-year sentence, Celsius founder Alex Mashinsky received 12 years, and former Binance chief Changpeng Zhao briefly served four months before being pardoned by President Donald Trump.
Source: https://coinpaper.com/13060/do-kwon-sentenced-to-15-years-for-collapse-of-terra-ecosystem
