Do Kwon Sentenced to 15 Years in Prison for Crypto Fraud

Fri Dec 12 2025 05:36:06 GMT+0200 (Eastern European Standard Time)

The founder of Terraform Labs, Do Kwon, receives a 15-year prison sentence after misleading investors in the collapse of his cryptocurrency ecosystem, resulting in billions lost.

Do Kwon, the cryptocurrency mogul behind Terraform Labs, has been sentenced to 15 years in prison for defrauding investors. The court proceedings revealed personal testimonies from victims who faced severe financial ruin due to Kwon's actions, which led to the collapse of a $40 billion crypto market. Kwon's defense cited hubris and desperation rather than greed as reasons for his misconduct, while prosecutors highlighted the calculated nature of his deceitful practices.

NEW YORK (AP) — Cryptocurrency mogul Do Kwon was sentenced Thursday to 15 years in prison for misleading investors who lost billions when his company’s crypto ecosystem collapsed in 2022.

Kwon’s sentencing by a federal judge in New York City follows his guilty plea to fraud charges connected to Terraform Labs’ $40 billion cryptocurrency crash. Prosecutors described how Kwon had weaponized investor trust, leading to catastrophic financial losses that affected individuals and charities alike.

Victims recounted the personal toll of the fraud during the hearing, detailing how their life savings evaporated and the ensuing hardships that followed. One victim revealed that their marriage fell apart and that he had to live with his parents after losing his family's entire nest egg.

While sentencing guidelines suggested a 25-year prison term, the prosecution requested 12 years, considering Kwon's guilty plea, potential further charges in Korea, and time already served in Montenegro. Kwon's defense argued for a five-year sentence, claiming his actions stemmed from a misguided sense of confidence rather than greed.

After fleeing from Singapore to Serbia and Montenegro amid a pending crackdown, Kwon was arrested in March 2023 with a false passport and later extradited to the U.S. Judge Paul A. Engelmayer will finalize Kwon’s sentence following statements from him and his lawyers.

Kwon's Terraform Labs previously touted its stablecoin, TerraUSD, as a reliable investment, but it collapsed dramatically, leading to widespread crisis in the cryptocurrency market. In his own words, Kwon acknowledged his responsibility, expressing regret for misrepresentations that have caused severe damage to the community.

The fallout from the collapse erased approximately $40 billion in market value for investors worldwide, a loss greater than that caused by notorious figures such as FTX's Sam Bankman-Fried. The case highlights the delicate balance of trust and responsibility existing within the cryptocurrency space.