Do Kwon, a South Korean cryptocurrency govt charged with fraud, stands along with his lawyer David Patton to plead responsible in entrance of U.S. District Choose Paul Engelmayer in New York Metropolis, New York, U.S., August 12, 2025 on this courtroom sketch.
Jane Rosenberg | Reuters
Do Kwon, the South Korean cryptocurrency entrepreneur behind two digital currencies that misplaced an estimated $40 billion in 2022, was sentenced on Thursday to fifteen years in jail for what a decide known as an “epic fraud.”
U.S. District Choose Paul A. Engelmayer, who handed down the sentence, sharply rebuked Kwon for repeatedly mendacity to on a regular basis buyers who trusted him with their life financial savings.
“This was a fraud on an epic, generational scale. Within the historical past of federal prosecutions, there are few frauds which have precipitated as a lot hurt as you’ve gotten, Mr. Kwon,” Engelmayer stated throughout a listening to in Manhattan federal court docket.
Kwon, 34, who co-founded Singapore-based Terraform Labs and developed the TerraUSD and Luna currencies, beforehand pleaded responsible and admitted to deceptive buyers a few coin that was supposed to take care of a gradual value in periods of crypto market volatility.
He’s one in all a number of cryptocurrency moguls to face federal costs after a droop in digital token costs in 2022 prompted the collapse of plenty of firms.
Wearing yellow jail garb, Kwon addressed the court docket and apologized to his victims, together with the tons of who submitted letters to the court docket describing the hurt they’d suffered.
“All of their tales had been harrowing and jogged my memory once more of the good losses that I’ve precipitated. I need to inform these victims that I’m sorry,” Kwon stated.
Ayyildiz Attila, one of many tons of of victims who submitted letters to the court docket, stated he misplaced between $400,000 and $500,000 within the collapse.
“My financial savings, my future, and the outcomes of years of sacrifice disappeared. I struggled to maintain up with funds and tasks, and every little thing I had labored forwas erased,” Attila stated.
Kwon’s lawyer Sean Hecker stated in an e-mail after the sentencing that Kwon spoke from the guts, expressed real regret and can proceed his efforts to make amends.
U.S. Lawyer Jay Clayton in Manhattan stated in an announcement following the listening to that Kwon devised elaborate schemes to inflate the worth of his cryptocurrencies and fled accountability when his crimes caught as much as him.
Prosecutors had requested for a sentence of a minimum of 12 years in jail, saying the crash of Kwon’s Terra cryptocurrency precipitated billions of {dollars} in losses and triggered a cascade of crises within the crypto market.
Kwon’s attorneys had requested that he be sentenced to not more than 5 years so he can return to South Korea to face legal costs.
Prosecutors charged Kwon in January with 9 legal counts for securities fraud, wire fraud, commodities fraud and cash laundering conspiracy.
Kwon was accused of deceptive buyers in 2021 about TerraUSD, a so-called stablecoin designed to take care of a worth of $1. Prosecutors alleged that when TerraUSD slipped under its $1 peg in Might 2021, Kwon informed buyers a pc algorithm generally known as “Terra Protocol” had restored the coin’s worth.
As a substitute, Kwon organized for a high-frequency buying and selling agency to secretly purchase tens of millions of {dollars} of the token to artificially prop up its value, in response to charging paperwork.
Kwon pleaded responsible in August to 2 counts, conspiracy to defraud and wire fraud, and apologized in court docket for his conduct.
“I made false and deceptive statements about why it regained its peg by failing to reveal a buying and selling agency’s position in restoring that peg,” Kwon stated on the time. “What I did was fallacious.”
Kwon agreed in 2024 to pay $80 million as a civil positive and be banned from crypto transactions as a part of a $4.55 billion settlement he and Terraform reached with the U.S. Securities and Trade Fee.
He additionally faces costs in South Korea. As a part of his plea deal, prosecutors is not going to oppose Kwon’s potential utility to be transferred overseas after serving half his U.S. sentence.
