The co-founder of Terraform Labs, Do Kwon, was sentenced Thursday to 15 years in federal prison for orchestrating a $40 billion crypto fraud — a sentence significantly lighter than the 25 years imposed on FTX founder Sam Bankman-Fried (SBF) last year, despite Kwon's fraud causing financial damages nearly four times greater.
The disparity in sentences highlights how behavior in court, remorse, and cooperation with authorities can profoundly influence outcomes in high-profile financial crime cases.
The verdicts
Federal judge Paul Engelmayer, who presided over Kwon's case in the Southern District of New York, described the collapse of Terra-Luna as “a fraud on an epic, generational scale.” He dismissed both the prosecutor's recommendation of 12 years, deeming it “unreasonably lenient,” and the defense's request for five years, calling it “absolutely unthinkable and profoundly unreasonable.”
“Your crime caused real people a loss of $40 billion in real money, not just a paper loss,” Engelmayer told Kwon, noting that there could have been up to a million victims worldwide.
In contrast, Judge Lewis Kaplan sentenced SBF to 25 years in March 2024 for a $11 billion fraud, citing the defendant's “extraordinary flexibility with the truth” and “total absence of real remorse.”
Why this difference?
Plea deal versus trial
Kwon pleaded guilty in August 2025 to charges of conspiracy and wire fraud, taking 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 all. The community looked to me to understand the direction to take and I, in my arrogance, led them astray.”
SBF, on the other hand, chose to go to trial and declared his innocence throughout. He argued that FTX was merely going through a “liquidity crisis” and was not a true 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 ever seen in nearly 30 years on the bench. “When he wasn’t outright lying, he was often evasive, pedantic, dodging questions,” Kaplan stated.
The judge also found that SBF had attempted to influence witnesses before the trial. He sent messages to former FTX legal advisor Ryne Miller, suggesting to “check things with each other.”
Kwon, however, listened to victim statements — 315 letters submitted to the court — and directly apologized. “Hearing the voices of the victims was heartbreaking and reminded me once again of the great losses I caused,” he told Judge Engelmayer.
Future legal exposure
A crucial factor in Kwon's sentencing is his pending proceedings in South Korea. He faces charges that could lead to an additional 40 years in prison. Judge Engelmayer explicitly considered this aspect when determining the sentence. Kwon is likely to be extradited to face trial in his home country after serving his sentence in the United States.
SBF faces nothing similar abroad, making the U.S. 25-year sentence his primary punishment. However, he is actively seeking to overturn the ruling. In November 2025, SBF's legal team filed an appeal, arguing that he had been “presumed guilty” even before the trial began. Attorney Alexandra Shapiro claims that the court blocked key evidence demonstrating FTX's solvency and allowed biased treatment during the proceedings. The Second Circuit Court of Appeals is expected to take several months to issue a decision.
Do KwonSam Bankman-FriedSentence15 years25 yearsEstimated Loss$40 billion$11 billionStatementPleads guiltyGoes to trialRemorseDirect apologies to victimsNo remorse shownPerjuryNone3 cases foundWitness tamperingNoneYesAdditional chargesUp to 40 years in South KoreaNone
Source: BeInCrypto The big picture
Both cases represent historic moments in the enforcement of rules in the crypto sector. Prosecutors emphasized that the losses caused by Kwon exceed those caused by SBF, OneCoin co-founder Karl Sebastian Greenwood, and former CEO of Celsius Alex Mashinsky combined.
The sentences send a clear message to the crypto sector: cooperation and a genuine sense of remorse can significantly reduce the length of detention.
Kwon agreed to forfeit $19.3 million as part of the plea deal. Additionally, he was ordered to pay an $80 million fine and received a lifetime ban from engaging in cryptocurrency transactions, as stipulated in the 2024 SEC settlement.
Kwon's request to serve his sentence in South Korea was denied.
