- Do Kwon, founder of Terraform Labs, was sentenced to 15 years in prison for fraud related to the collapse of the Terra/Luna system.
- Kwon pleaded guilty to wire fraud and conspiracy to defraud after charges were filed in 2023.
- The judge imposed a harsher sentence than prosecutors requested, citing the seriousness of the crimes.
- Kwon must forfeit $19 million and will be extradited to South Korea to face additional charges carrying up to 40 years in prison.
- Kwon will receive credit for time served in the United States and Montenegro before sentencing concludes.
Do Kwon, the 34-year-old founder and former CEO of Terraform Labs, was sentenced to 15 years in prison for his involvement in the collapse of the Terra/Luna cryptocurrency system. The system’s valuation dropped by roughly $100 billion. Kwon’s sentencing follows his guilty plea in August to charges of wire fraud and conspiracy to defraud.
Kwon’s lawyers had requested a five-year sentence, arguing that the 12 years sought by prosecutors was excessive. However, U.S. prosecutors disagreed, calling five years “utterly insufficient” and stating Kwon was “underselling the gravity of his crimes.”i The judge ultimately decided on a more severe sentence than the prosecution requested, imposing 15 years in prison.
Additionally, Kwon agreed to a $19 million forfeiture. His legal team highlighted that Kwon has already spent three years in custody, with more than half that time in difficult conditions in Montenegro. The judge will apply credit for this time served both in the United States and before extradition.
Kwon is also facing a separate trial in South Korea, where he could receive up to 40 years in prison for related offenses. After serving the U.S. portion of his sentence, he will be extradited to South Korea to face these charges.
This sentencing places Kwon among other high-profile figures in the cryptocurrency industry who have been convicted and sentenced in the United States. Notable examples include Sam Bankman-Fried, who received 25 years for fraud related to FTX, and Alex Mashinsky, sentenced to 12 years for fraud linked to Celsius. Former Binance CEO Changpeng Zhao received a four-month sentence last year for violating the Bank Secrecy Act.
For further details on developments in crypto-related legal cases, see the original report here and extradition update.
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