NEW YORK — Terraform Labs co-founder Do Kwon was sentenced to 15 years in prison on Wednesday for his role in a massive fraud that saw roughly $50 billion wiped from the crypto ecosystem over the course of just three days in May 2022.
The sentence, handed down by District Judge Paul Engelmeyer of the Southern District of New York (SDNY), is slightly more than the 12-year sentence requested by prosecutors and much greater than the five-year sentence suggested by Kwon’s lawyers. Kwon must serve at least half of this sentence before he can apply for a transfer to South Korea, where he faces further charges.
The judge’s sentence followed a lengthy hearing, with victims testifying both in-person and via phone about how Terra’s collapse affected them or their families.
Engelmeyer said that he took under consideration the “eye-popping” magnitude of Kwon’s fraud, in terms of both the money lost and the sheer number of victims, as well as the fact that he attempted to run from the law, fleeing at first to Serbia, then Montenegro, on false passports before getting caught en route to Dubai. In an hour-long speech, the judge detailed Kwon’s numerous lies, and called his conduct — particuarly during UST’s final de-peg, during which he publicly advised retail investors to stay invested while he and others close to the project privately began to exit their positions — “despicable.”
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