Terraform Labs co-founder Do Kwon was sentenced Thursday to 15 years in federal prison for a $40 billion cryptocurrency fraud—the sentence is particularly significantly lighter than the 25-year sentence handed down last year to FTX founder Sam Bankman-Fried (SBF), despite Kwon's financial damage being nearly four times as much.
Variations in sentencing are explained by courtroom behavior, remorse, and cooperation with authorities, which can significantly affect outcomes in high-profile financial crimes.
Sentences
U.S. District Judge Paul Engelmayer, presiding over Kwon's case in the Southern District of New York, described the Terra-Luna collapse as “a massive fraud on a generational scale.” He dismissed both the prosecution's recommended 12-year sentence as too lenient and the defense's five-year request as completely unreasonable.
“Your actions caused real losses of $40 billion to real people, not just fictitious losses,” Engelmayer told Kwon, noting that there could be as many as a million victims worldwide.
For comparison, Judge Lewis Kaplan sentenced SBF in March 2024 to 25 years in prison for a $11 billion fraud, justifying the decision by citing the defendant's “extreme flexibility with the truth” and “an evident lack of remorse.”
Why the difference?
Plea vs. trial
Kwon pleaded guilty in August 2025 to conspiracy and wire fraud and took responsibility for misleading investors about the stability mechanisms of TerraUSD. In a letter to the court, he wrote: “I am solely responsible for all the suffering. The community trusted me to show the way, and I led them astray due to my own arrogance.”
SBF has maintained his innocence during the trial. He claimed that FTX only faced a “liquidity crisis,” not actual fraud. The jury took only four hours to convict him on all seven counts.
Courtroom behavior
Judge Kaplan noted that SBF 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. “If he didn’t outright lie, he often dodged, split hairs, and avoided questions,” Kaplan said.
The judge also found that SBF had attempted to influence witnesses before the trial. He sent messages to former FTX General Counsel Ryne Miller suggesting that they should “go through things together.”
Kwon, meanwhile, listened to impact statements from victims—315 letters were submitted to the court—and apologized to the victims. “Hearing from the victims was shocking and reminded me of the immense losses I caused,” he told Judge Engelmayer.
Future legal risk
A significant factor in Kwon's sentence was that he faces pending criminal proceedings in South Korea as well. There, he could receive up to an additional 40 years in prison. Judge Engelmayer considered this when determining the length of the sentence. Kwon will likely be extradited to his home country for trial once his U.S. sentence is served.
SBF is not known to face similar legal risks abroad, so his 25-year sentence in the U.S. is his primary punishment. However, he is seeking to overturn his conviction. In November 2025, SBF's lawyers appealed the sentence, arguing that he was considered guilty before the trial. According to his lawyer Alexandra Shapiro, the court prevented the use of key evidence that would have demonstrated FTX's solvency and treated him unfairly throughout the process. A ruling from the appellate court is expected in several months.
Do KwonSam Bankman-FriedSentence15 years25 yearsEstimated losses40 billion dollars11 billion dollarsPleaGuiltyTrial sentenceRemorseApologized to victimsNo remorsePerjuryNothing3 counts foundWitness tamperingNothingYesAdditional chargesUp to 40 years in South KoreaNothing
Source: BeInCrypto Broader Perspective
Both cases are significant moments in the history of cryptocurrency regulation. Prosecutors emphasized that the losses caused by Kwon exceeded those of SBF, OneCoin founder Karl Sebastian Greenwood, and former Celsius CEO Alex Mashinsky combined.
The sentences clearly communicate to the crypto industry: cooperation and genuine remorse can significantly shorten prison time.
Kwon has agreed to forfeit $19.3 million as part of his plea deal. Additionally, he was ordered to pay an $80 million fine and received a lifetime ban from cryptocurrency transactions as a result of the 2024 SEC ruling.
His request for the sentence to be served in South Korea was rejected.
