Core Charges and Scale of the Fraud
MassiveFinancial Fraud: Kwon was convicted and sentenced for orchestrating one of the largest cryptocurrency frauds in history, which led to an estimated $40 billion loss for investors worldwide when the ecosystem collapsed in May 2022.
Misleading Investors: Prosecutors argued that Kwon and Terraform Labs misled investors about the stability and reliability of TerraUSD, which was touted as a reliable "stablecoin" pegged to the US dollar.
Manipulation: He was found to have engaged in manipulation, including using "fake Chai blockchain transactions and trading bots to manipulate the prices of synthetic assets issued by Mirror," to prop up the ecosystem and create an "illusion of resilience."
Guilty Plea: Kwon pleaded guilty to two counts of fraud in August 2025.
👨⚖️ The Judge's Rationale
The US District Judge, Paul Engelmayer, specifically highlighted the severity of the crime:
He called the crimes a "fraud on an epic, generational scale."
He emphasized that the offense caused "real people to lose $40 billion in real money," leading to "incalculable human wreckage."
The 15-year sentence was even longer than the 12 years requested by the prosecutors, reflecting the judge's assessment of the gravity of the offenses and the immense harm caused to potentially over a million victims.
Do Kwon was extradited to the United States from Montenegro, where he was arrested in March 2023 for attempting to travel with a falsified passport.
