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U.S. court sentences disgraced Korean crypto mogul to 15 years in prison

Published: 12 Dec. 2025, 08:37 Updated: 12 Dec. 2025, 14:13

YOON SO-YEON
[email protected]

Police officers escort Terraform Labs co-founder Do Kwon after he served a sentence for document forgery, in Podgorica, Montenegro, March 23, 2024. [REUTERS/YONHAP]

A U.S. federal court on Thursday meted out a 15-year jail term to disgraced Korean crypto mogul Do Kwon in a trial over a crypto crash that resulted in over $40 billion in losses to investors in the United States and around the world in 2022.

Kwon, 34-year-old co-founder of Terraform Labs, the parent firm of crashed TerraUSD and Luna coins, was charged for his involvement in schemes to deceive investors to inflate the value of the cryptocurrencies.

Kwon had denied his charges until August, when he pleaded guilty to two criminal counts — conspiracy to defraud and wire fraud — leading the court to deliberate on the sentence, not whether he was guilty.

"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," U.S. District Judge Paul A. Engelmayer said during a hearing in Manhattan federal court.

Kwon apologized to his victims, including the hundreds who submitted letters to the court describing the harm they suffered, according to a Reuters report.

"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," Kwon said.

Montenegrin police officers escort Korean citizen, Terraform Labs founder Do Kwon in Montenegro's capital Podgorica, March 23, 2024. [AP/YONHAP]

In January, the Justice Department alleged, citing his indictment, that Kwon had made false and misleading claims about the stability and efficacy of Terraform's cryptocurrency stablecoin protocol and its use of blockchain technology, among other things.

The department said that if convicted of all of his initial nine charges, including money laundering conspiracy, he could face a maximum penalty of 130 years in prison.

Under a plea deal, U.S. prosecutors are to support Kwon serving the second half of his sentence in Korea, provided that he complies with the terms of his plea deal and forfeits over $19 million.

Kwon co-founded Terraform Labs in 2018. The company touted its TerraUSD cryptocurrency as a so-called dollar-pegged stablecoin designed to maintain a value of $1. He is accused of falsely notifying investors that when the TerraUSD fell below the $1 value, the company restored the value using a computer algorithm called the "Terra Protocol."

Police officers escort Korean crypto mogul Do Kwon in Podgorica, Montenegro, on May 11, 2023. [EPA/YONHAP]

Instead, Kwon arranged for a high-frequency trading firm to secretly buy millions of dollars of the token to artificially prop up its price, according to Reuters.

Kwon was extradited to the U.S. from Montenegro in December, where he was arrested in March 2023 while traveling on a fake passport.

BY YOON SO-YEON, YONHAP [[email protected]]