Do Kwon, the co-founder of Terraform Labs, was sentenced to 15 years in federal prison on Thursday for defrauding cryptocurrency worth 40 billion USD, a sentence lighter than the 25-year imprisonment of Sam Bankman-Fried (SBF), the founder of FTX, last year. Although the financial damage from Kwon's case was nearly four times greater.
The differences in this sentencing highlight that courtroom behavior, remorse, and cooperation with authorities can influence outcomes in high-profile business criminal cases
Summary
Judge Paul Engelmayer of the United States District Court for the Southern District of New York, who presided over Kwon's case, stated that the collapse of Terra-Luna was "a monumental fraud". He also rejected the prosecutors' proposal for a 12-year prison sentence, stating it was "ridiculously light" and dismissed the defense's request for only five years in prison as "unthinkable and utterly unreasonable"
Engelmayer told Kwon, "Your crimes caused people to lose a total of 40 billion USD, not just paper losses," noting that there are victims worldwide totaling up to one million
On the other hand, Judge Lewis Kaplan sentenced SBF to 25 years in March 2024 for fraud amounting to 11 billion USD, stating that the defendant had "a high degree of flexibility with the truth" and "showed a complete lack of remorse"
Why it’s different
Plea deal and trial
Kwon pleaded guilty in August 2025 to conspiracy and wire fraud, admitting responsibility for misleading investors about the stability mechanisms of TerraUSD. In a letter to the court, he wrote, "I am solely responsible for the pain of everyone. Everyone in the community looked to me to find the right path, and I was so self-absorbed that I led them astray"
While SBF chose to fight the case in court and always maintained his innocence, he claimed that FTX merely experienced a "liquidity crisis" rather than outright fraud, which the jury took only four hours to find him guilty on all seven counts
Court behavior
Judge Kaplan found that SBF had lied to the court at least three times during testimony. Kaplan remarked that SBF was the most evasive witness he had seen in nearly thirty years on the bench. "When he wasn't outright lying, he often obfuscated, dodged questions, or parsed words," Kaplan noted
The judge also found that SBF attempted to tamper with witnesses before the trial. He sent messages to Ryne Miller, the general counsel of FTX, offering to "discuss matters together"
On the other hand, Kwon heard statements from victims, with 315 letters submitted to the court, and expressed direct apologies. "Hearing from victims was heartbreaking and a stark reminder of the losses I caused," he told Judge Engelmayer
The legal risks in the future
A key factor influencing Kwon's sentencing was the impending litigation against him in South Korea, where he faces charges that could lead to an additional prison sentence of up to 40 years. Moreover, Judge Engelmayer clearly considered this issue when determining Kwon's sentence, thus Kwon is highly likely to be extradited for trial in his home country after completing his sentence in the United States
SBF does not face the same legal risks abroad, thus the 25-year prison sentence in the U.S. is his primary punishment. However, he continues to fight to overturn his conviction, showing no signs of giving up. In November 2025, SBF's legal team filed an appeal, arguing that SBF was already viewed as guilty before the trial began. Furthermore, his attorney, Alexandra Shapiro, pointed out that the court had blocked crucial evidence confirming FTX's ability to repay debts and allowed for biased practices during the trial process. The lower court is expected to take months to announce its ruling
Do KwonSam Bankman-FriedSentence15 years25 yearsEstimated LossUSD 40 billionUSD 11 billionPleaGuiltyConviction by trialRemorseApologized to victimsNo remorsePerjuryNo found 3 countsWitness TamperingNoYesAdditional ChargesCould face up to 40 years in South KoreaNo
Source: BeInCrypto broader overview
Both of these cases are considered significant events in the enforcement of law against the crypto industry. Additionally, prosecutors indicated that the damage caused by Kwon was greater than the combined total of SBF, Karl Sebastian Greenwood, co-founder of OneCoin, and Alex Mashinsky, former CEO of Celsius
This sentencing outcome communicates a clear message to the crypto sphere that cooperation and genuine remorse can significantly reduce prison time
Kwon agreed to forfeit USD 19.3 million as part of a plea deal. He was also ordered to pay a fine of USD 80 million and banned from cryptocurrency transactions for life under an agreement with the SEC in 2024
The request for him to serve a sentence in South Korea was denied
