#TerraUSD Founder #DoKwon sentenced to 15 years in prison due to a $40 billion cryptocurrency crash
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South Korean cryptocurrency entrepreneur Do Kwon is on trial in the United States for fraud and has been sentenced to 15 years in prison.
1. Verdict and Charges
U.S. District Judge Paul A. Engelmayer harshly criticized Kwon during sentencing, accusing him of deceiving ordinary investors who entrusted their life savings to him.
The judge stated in the federal court in Manhattan, New York:
"This is an epic, generational-scale fraud. Cases that cause such enormous harm are few and far between in the history of federal jurisprudence."
Kwon, 34 years old, is a co-founder of Terraform Labs, which developed two cryptocurrencies, TerraUSD and LUNA, that crashed in 2022, resulting in losses of up to $40 billion. He previously pleaded guilty and admitted to misleading investors into believing that this stablecoin could maintain its price stability amid volatility.
He is also one of several cryptocurrency magnates facing federal charges after the 2022 crypto market crash.
2. Kwon Apologizes in Court
Wearing a yellow prison uniform, Kwon apologized to the victims in court, where hundreds of victims sent letters describing their losses.
One victim, Ayyildiz Attila, lost $400,000 to $500,000 and said:
"My savings, my future, and the fruits of years of hard work were all gone overnight. I even struggled to maintain basic living expenses; everything has been wiped away."
Kwon's lawyer, Sean Hecker, stated that Kwon's apology was sincere, and he would continue to work on compensating the victims.
U.S. Attorney Jay Clayton pointed out that Kwon artificially inflated the coin's price through complex maneuvers and attempted to evade responsibility after the situation was exposed.
3. Sentencing Recommendations from Prosecution and Defense
Prosecution: At least 12 years, believing that the Terra crash triggered a chain crisis.
Defense: No more than 5 years, allowing Kwon to return to South Korea to face local charges as soon as possible.
Kwon pleaded guilty in August 2025 to two counts: conspiracy to commit fraud and wire fraud.
He admitted to falsely claiming that the algorithm would automatically fix the price when TerraUSD depegged, while secretly instructing a high-frequency trading firm to buy millions of dollars’ worth of coins to prop up the price.
