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Do Kwon, the South Korean entrepreneur behind the TerraUSD and Luna cryptocurrencies—which collapsed in 2022 and wiped out an estimated $40 billion—has been sentenced to 15 years in U.S. federal prison for what the judge described as an “epic fraud.”
U.S. District Judge Paul A. Engelmayer delivered the sentence on December 11 in Manhattan, sharply criticizing Kwon for misleading everyday investors who trusted him with their savings.
“This was a fraud on an epic, generational scale. Few federal cases in history have caused as much harm,” Engelmayer said.
Kwon, 34, co-founded Terraform Labs in Singapore. He pleaded guilty, admitting he misled investors about TerraUSD, a cryptocurrency marketed as being able to remain stable even during volatile market conditions.
He is one of several crypto industry figures prosecuted following the sharp downturn in digital asset markets in 2022, which triggered the collapse of multiple firms.
Appearing in court in yellow prison attire, Kwon apologized to victims, hundreds of whom submitted letters detailing their financial devastation.
“Their stories were harrowing and reminded me of the immense harm I caused. To the victims, I am sorry,” he said.
Victims described losing life savings, retirement funds, and charitable resources. One said the collapse pushed him to consider suicide after his father’s retirement savings were wiped out.
Judge Engelmayer dismissed both the government’s request for a 12-year sentence—calling it “too lenient”—and the defense’s plea for five years, labelling it “utterly unthinkable.” Kwon faced a potential maximum of 25 years.
“Your actions caused real people to lose 40 billion dollars in actual money,” the judge stated, adding that Kwon had an “almost mystical hold” over investors.
Prosecutors noted that the financial damage exceeded losses from schemes involving FTX founder Sam Bankman-Fried and OneCoin’s Karl Sebastian Greenwood combined. The judge estimated that as many as one million people may have been affected.
Under his plea agreement, Kwon will forfeit more than $19 million. His attorneys argued his conduct was driven by arrogance and desperation rather than greed.
The judge also denied Kwon’s request to serve his sentence in South Korea, where he faces additional charges and where his wife and daughter live.
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