Do Kwon Sentenced to 15 Years in Prison
NEW YORK, Dec 11 – South Korean entrepreneur Do Kwon, known for creating two cryptocurrencies that collectively lost around $40 billion last year, was sentenced to 15 years in prison by a U.S. District Judge. The judge referred to Kwon’s actions as “epic fraud.”
Judge Paul A. Engelmayer expressed strong disapproval of Kwon’s repeated lies to ordinary investors who believed in him and, tragically, entrusted their life savings.
“This was a generational fraud. Mr. Kwon, few frauds in federal prosecution history have been as damaging as yours,” Engelmayer stated during the hearing in Manhattan.
Kwon, 34, co-founder of Terraform Labs based in Singapore, previously admitted to misleading investors about a stablecoin called TerraUSD, which was designed to maintain a stable price amidst turbulent cryptocurrency fluctuations.
He is among several cryptocurrency leaders now facing federal charges following a drastic drop in digital currency values that led many companies to bankruptcy.
Dressed in a yellow prison uniform, Kwon addressed the court, apologizing to victims, including many who sent letters detailing the financial devastation they experienced.
Kwon conveyed, “All their stories are tragic and remind me of the tremendous loss I’ve caused. I want to express my apologies to the victims.”
Ayildis Attila, one victim who wrote to the court, stated he lost between $400,000 and $500,000 due to the collapse.
“All my savings and future plans went up in smoke. I struggled to manage my bills, and everything I’d worked for disappeared,” Attila exclaimed.
Kwon’s lawyer, Sean Hecker, claimed after the verdict that Kwon spoke sincerely, demonstrating real remorse and a desire for redemption.
Manhattan U.S. Attorney Jay Clayton remarked that Kwon orchestrated a complex scheme to inflate cryptocurrency values and evade accountability once his actions surfaced.
Prosecutors sought a minimum 12-year sentence, blaming Kwon’s actions for extensive losses and triggering multiple crises in the cryptocurrency sector.
On the other hand, Kwon’s attorney argued for a sentence not exceeding five years, so he could return to South Korea for pending criminal charges.
Prosecutors formally charged Kwon in January with nine offenses, including securities fraud and money laundering conspiracy.
Kwon faced accusations in 2021 of misleading investors about TerraUSD, which was meant to hold steady at $1. When it fell below that value in May 2021, Kwon claimed a computer algorithm called Terra Protocol had restored its price.
However, prosecutors contended Kwon secretly arranged for trading firms to buy millions in tokens to falsely bolster prices.
In August, Kwon pled guilty to two counts relating to conspiracy and wire fraud, and expressed remorse during the court proceedings, admitting he failed to disclose trading activities tied to the stablecoin.
In a further settlement in 2024, Kwon consented to pay $80 million in civil penalties and agreed to be barred from cryptocurrency trading as part of a larger resolution with the U.S. Securities and Exchange Commission.
Kwon also faces charges in South Korea. According to the plea deal, prosecutors will not contest any extradition request after he serves half his sentence in the U.S.
