Do Kwon has been sentenced to 15 years in a New York federal prison for his role in the massive Fraud tied to the collapse of Terraform Labs and the downfall of TerraUSD. U.S. District Judge Paul Engelmayer described the scheme as
“A fraud of epic generational scale,”
handing down a punishment even harsher than what prosecutors requested.
Kwon, 34, spent months evading authorities before being caught in Montenegro in 2023 with a fake passport. After a lengthy extradition process, he faced U.S. charges and will still be prosecuted in South Korea once his American sentence ends.
In court, Kwon apologized and accepted responsibility, though his legal team asked for no more than five years, an argument the judge rejected as
“Wildly unreasonable.”
Kwon had already pleaded guilty to conspiracy and wire Fraud, agreeing to forfeit $19.3 million and several properties. Prosecutors chose not to pursue restitution for the estimated $40 billion lost when TerraUSD unraveled, calling it too complex to calculate.
Terraform Labs, founded by Kwon and Daniel Shin in 2017, collapsed in 2022 after TerraUSD broke its peg, triggering widespread market damage. A U.S. civil jury later found both Kwon and the company liable for securities Fraud tied to misleading claims about TerraUSD’s stability.
Even after serving his U.S. time, Do Kwon still faces another legal battle in South Korea.
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