Do Kwon Sentenced to 15 Years for $40 Billion Crypto Collapse
Do Kwon, founder of Terraform Labs, has been sentenced to 15 years in prison for the $40 billion collapse of TerraUSD and Luna. A New York judge called the scheme a "fraud on an epic scale" that devastated investors worldwide.
Do Kwon Sentenced to 15 Years for $40B Terra Crypto Fraud
The saga of one of the most devastating crashes in cryptocurrency history reached a decisive conclusion on Thursday. Do Kwon, the 34-year-old entrepreneur behind the TerraUSD and Luna digital currencies, was sentenced to 15 years in prison by a New York federal judge.
U.S. District Judge Paul Engelmayer did not mince words during the sentencing, describing the collapse as a "fraud on an epic, generational scale." The implosion of Kwon's Terraform Labs in 2022 wiped out an estimated $40 billion (£29.9 billion) in investor value almost overnight, triggering a "crypto winter" that destabilized the entire industry.
Kwon, who was extradited from Montenegro to face charges, had previously pleaded guilty to wire fraud and conspiracy to defraud. While prosecutors recommended a 12-year sentence, Judge Engelmayer opted for a harsher 15-year term, citing the "incalculable human wreckage" caused by the scheme.
Victim impact statements read in court painted a grim picture of lost life savings, depleted college funds, and ruined retirements. The judge noted that Kwon held an "almost mystical hold" over his investors, many of whom believed the TerraUSD stablecoin was a safe, low-risk place to park their money. In reality, prosecutors argued it was an illusion propped up by secret cash infusions and lies.
"I have spent almost every waking moment of the last few years thinking of what I could have done differently," Kwon told the court, expressing remorse before the sentence was handed down.
The 15-year sentence marks a significant moment of accountability for the crypto sector, landing just under the 25-year sentence given to FTX founder Sam Bankman-Fried earlier this year.
