Terraform Labs co-founder Do Kwon has been sentenced to 15 years in federal prison on Thursday for orchestrating a $40 billion cryptocurrency fraud. This sentence is notably lower than the 25 years that FTX founder Sam Bankman-Fried (SBF) received last year, despite Kwon causing nearly four times as much financial damage.
This difference in punishment shows how behavior in the courtroom, showing remorse, and cooperating with authorities can significantly influence the outcome of high-profile fraud cases.
The verdict
U.S. District Judge Paul Engelmayer, who ruled on Kwon's case in Southern New York, described the collapse of Terra-Luna as "fraud on an epic and large scale." He rejected the prosecutor's proposal for 12 years as "unreasonably lenient" and the defense's request for five years as "totally unimaginable and extremely unreasonable."
"Because of your crime, real people lost $40 billion in real money, not paper losses," Engelmayer said to Kwon. He noted that there could be as many as a million victims worldwide.
In comparison: Judge Lewis Kaplan sentenced SBF to 25 years in prison in March 2024 for a fraud of $11 billion. He pointed to SBF's "exceptionally flexible handling of the truth" and a "seemingly total lack of genuine remorse."
Why the difference
Confession vs. trial
Kwon pleaded guilty in August 2025 to conspiracy and wire fraud, taking responsibility for misleading investors about the stability mechanisms of TerraUSD. In a letter to the court, he wrote: "I alone am responsible for everyone's pain. The community looked to me for the right path, and out of pride, I led them astray."
SBF, on the other hand, went through the process and insisted he was innocent. He claimed that FTX was merely experiencing a "liquidity crisis", not fraud. The jury took only four hours to find him guilty on all seven counts.
Behavior in the courtroom
Judge Kaplan concluded that SBF had committed perjury at least three times during his testimony. Kaplan described SBF's performance on the witness stand as the most "evasive" he had seen in nearly 30 years as a judge. "If he wasn't outright lying, he often evaded questions, twisted words, or sidestepped," said Kaplan.
The judge also ruled that SBF attempted to influence witnesses before the trial. He sent messages to former FTX attorney Ryne Miller proposing to "coordinate things together."
Kwon, on the other hand, listened to the statements of victims—315 letters sent to the court—and directly apologized. "Hearing the victims was moving and reminded me again of the great losses I have caused," he told Judge Engelmayer.
Future legal exposure
An important point in determining Kwon's sentence was his upcoming prosecution in South Korea. There he could face an additional 40 years in prison. Judge Engelmayer consciously took this into account in his decision. Kwon will likely be extradited to South Korea once he has served his sentence in the U.S.
SBF is not awaiting a similar foreign sentence. His American sentence of 25 years is his primary sentence. He is currently attempting to appeal his conviction. In November 2025, SBF's legal team filed an appeal. They argue that he was "already presumed guilty" before his trial began. His attorney Alexandra Shapiro states that the court blocked crucial evidence regarding FTX's solvency and that there was biased treatment. The ruling from the Second Circuit could take several months.
Do KwonSam Bankman-FriedSentence15 years25 yearsEstimated damage$40 billion$11 billionConfessionKnown guiltGuilty by trialRemorseApologized to victimsNo remorse shownPerjuryNone3 times determinedWitness tamperingNoYesAdditional chargesUp to 40 years in South KoreaNone
Source: BeInCrypto The bigger picture
Both cases are significant milestones in the enforcement of the crypto world. Prosecutors emphasized that the losses caused by Kwon are greater than those caused by SBF, OneCoin co-founder Karl Sebastian Greenwood, and former Celsius CEO Alex Mashinsky combined.
These statements send a clear signal to the crypto sector: cooperating with justice and showing genuine remorse can significantly reduce prison sentences.
Kwon has agreed to forfeit $19.3 million as part of his deal. He must also pay a fine of $80 million and is barred from participating in crypto transactions again, according to the settlement with the SEC in 2024.
His request to serve his sentence in South Korea has been denied.
