Crypto Founder Do Kwon Sentenced to 15 Years in U.S. Prison for Fraud

South Korean cryptocurrency entrepreneur Do Kwon has been sentenced to 15 years in prison in the United States.

Kwon, who oversaw the collapse of an estimated $40 billion in digital assets in 2022, was convicted on fraud-related charges. U.S. District Judge Paul A. Engelmayer delivered the sentence on Thursday, December 11, in Manhattan federal court, sharply criticizing Kwon for misleading investors who trusted him with their savings.

During the hearing, Judge Engelmayer stated: “This was a fraud on an epic, generational scale. In the history of federal prosecutions, there are few frauds that have caused as much harm as you have, Mr. Kwon.”

Kwon co-founded the Singapore-based Terraform Labs, the company behind the TerraUSD and Luna cryptocurrencies. In court, he pleaded guilty and admitted to misleading investors about a coin that was supposed to maintain a stable market value.

He is among several cryptocurrency executives charged following the 2022 digital-asset crash that toppled multiple firms across the industry.

Wearing yellow prison clothing, Kwon apologized to those affected, referencing the hundreds of victim letters submitted to the court.

He told the judge: “All of their stories were harrowing and reminded me again of the great losses that I’ve caused. I want to tell these victims that I am sorry.”

Victims described devastating financial losses, including wiped-out savings and retirement funds, with some charities also reporting significant setbacks.

Judge Engelmayer rejected both the government’s proposed 12-year sentence—calling it “unreasonably lenient”—and the defense’s request for five years, describing it as “utterly unthinkable and wildly unreasonable.” Kwon faced a maximum possible sentence of 25 years.

The judge emphasized the scale of the harm: “Your offence caused real people to lose 40 billion dollars in real money, not some paper loss,”

adding that Kwon had an “almost mystical hold” over investors and that the scheme amounted to “a fraud on an epic, generational scale.”

Prosecutors noted that losses from the Terraform Labs collapse were greater than those attributed to FTX founder Sam Bankman-Fried and OneCoin co-founder Karl Sebastian Greenwood combined. Judge Engelmayer estimated that up to one million people may have been impacted.

As part of his plea deal, Kwon agreed to forfeit more than $19 million. His lawyers argued that his actions stemmed from overconfidence and desperation rather than greed.

Judge Engelmayer also denied Kwon’s request to serve his sentence in South Korea, where he faces separate charges and where his wife and young daughter live.