The federal district judge Paul Engelmayer, who presides over Kwon's case in the Southern District of New York, described the collapse of Terra-Luna as "an epic and generational fraud." He rejected both the prosecution's recommendation of 12 years as "unreasonably lenient" and the defense's request for five years as "utterly unimaginable and completely unreasonable."
"His crime caused real people to lose 40 billion dollars in real money, not paper losses," Engelmayer told Kwon, pointing out that there could have been up to a million victims worldwide.
In contrast, Judge Lewis Kaplan sentenced Sam Bankman-Fried (SBF) to 25 years in March 2024 for an $11 billion fraud, citing the "exceptional flexibility of the defendant with the truth" and the "apparent lack of genuine remorse."
In August 2025, Kwon pleaded guilty to conspiracy and wire fraud, accepting responsibility for misleading investors about the stability mechanisms of TerraUSD. In a letter to the court, he wrote: "I am solely responsible for the suffering of all. The community expected me to know the way, and I, in my arrogance, misled them."
SBF, on the other hand, went to trial and maintained his innocence throughout the process. He argued that FTX was merely going through a "liquidity crisis" and not blatant fraud. The jury took only four hours to convict him on the seven charges.
Judge Kaplan determined that SBF committed perjury at least three times during his testimony. Kaplan described SBF's performance on the stand as the most evasive he had witnessed in nearly 30 years in court. "When he wasn't blatantly lying, he tended to be evasive, subtle, and evasive," Kaplan stated.
The judge also determined that SBF had attempted to manipulate witnesses before the trial. He sent messages to FTX's former general counsel, Ryne Miller, suggesting they "investigate things among themselves."
Kwon, on the other hand, listened to the victims' statements (315 letters submitted to the court) and apologized directly. "Hearing from the victims was heartbreaking and reminded me once again of the great losses I have caused," he told Judge Engelmayer.
A crucial factor in Kwon's sentencing was his pending prosecution in South Korea. He faces charges that could result in up to 40 additional years in prison. Judge Engelmayer explicitly considered this when formulating the sentence. Kwon is likely to be extradited for trial in his home country after serving his sentence in the United States.
SBF does not face comparable legal risk abroad, so his 25-year sentence in the United States is his main punishment. However, he is actively fighting to overturn his conviction. In November 2025, SBF's legal team filed an appeal, arguing that he was presumed guilty even before the trial began. His attorney, Alexandra Shapiro, claims that the court blocked key evidence demonstrating FTX's solvency and allowed a biased deal throughout the process. The Second Circuit is expected to take several months to issue a ruling.
Both cases represent key moments in the application of cryptocurrency law. The prosecution noted that Kwon's losses exceeded those caused by SBF, OneCoin co-founder Karl Sebastian Greenwood, and former Celsius CEO Alex Mashinsky, combined.
The results of the sentence send a clear message to the cryptocurrency industry: cooperation and genuine remorse can significantly reduce prison time.
Kwon agreed to pay $19.3 million as part of his settlement with the SEC. He was also ordered to pay a fine of $80 million and receive a lifetime ban on cryptocurrency transactions as part of his 2024 SEC settlement.
His request to serve his sentence in South Korea was denied.
