Do Kwon, co-founder of Terraform Labs, was sentenced to 15 years in prison after pleading guilty to wire fraud and conspiracy to commit fraud.
At a hearing on Thursday in the U.S. District Court for the Southern District of New York, Judge Paul Engelmayer sentenced Do Kwon to 15 years in prison for his role in the Terraform collapse, which resulted in approximately $40 billion in losses in the cryptocurrency market in 2022. He will receive credit for the 17 months he has been detained in the U.S. prior to extradition.
Before making the sentencing decision, Engelmayer heard statements from some of the victims of Terraform and questioned what kind of judicial proceedings Do Kwon might face in his home country of South Korea, where authorities are also pursuing charges against him.
According to Inner City Press, Do Kwon stated before the sentencing: "I want everyone to know that I have been thinking about what I could have done and what I can do. It has been four years since the collapse, and I have been separated from my family for three years. I hope to be punished in my homeland."
Reports indicate that Engelmayer stated that the U.S. prosecutors' recommendation of a 12-year sentence for Do Kwon was "unreasonable," while the five-year sentence requested by his lawyers was "so unreasonable that it would require an appellate court to overturn."
Engelmayer said: "For the next Do Kwon, if you commit fraud, you will lose your freedom for a long time, just like here. You have been eroded by the frenzy of cryptocurrency, and I believe that has not changed. You must be deprived of your ability. If it weren't for your guilty plea, my sentence would be higher."
The judge also added to Do Kwon:
Do Kwon may be extradited to South Korea after serving seven and a half years and serve the remainder of his U.S. sentence there. In his home country, he could face an additional maximum sentence of 40 years.
Prosecutors stated at the sentencing hearing that there are approximately 16,500 victims of the Terraform collapse, according to claims records in the ongoing bankruptcy case. Before Judge Engelmayer made his ruling, six victims were allowed to testify by phone, describing the financial losses they suffered from their Terra investments.
According to Inner City Press, one victim, Tatiana Dontsova, said: "I sold my apartment in Moscow to invest in Do Kwon. I moved to Tbilisi. The $81,000 I had is now down to $13. Kwon came up with Luna 2 and called it LUNC. He has no sense of responsibility towards investors. I am now officially homeless."
Kwon is accused of playing a role in the 2022 Terra ecosystem collapse and is expected to be handed over to U.S. authorities in December 2024 after extradition from Montenegro. His legal team had raised various challenges in the Montenegrin courts, delaying the legal proceedings for months.
As Kwon is expected to serve many years in prison, this co-founder of Terraform becomes the latest former prominent cryptocurrency executive to reach a plea agreement or be convicted in a U.S. court.
Former FTX CEO Sam Bankman-Fried is serving a 25-year sentence, former Binance CEO Changpeng Zhao served four months in prison—though he was later pardoned by U.S. President Donald Trump—and former Celsius CEO Alex Mashinsky was sentenced to 12 years in prison.
Related: Despite the Fed's policy shift, Bitcoin (BTC) rebound remains hindered at $94,000
Original: “Terraform Labs co-founder sentenced to 15 years in prison after guilty plea.”
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