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Cryptocurrency entrepreneur Do Kwon has been sentenced to 15 years in prison following the dramatic collapse of his crypto empire, which wiped out an estimated $40 billion in investor funds and caused a global market shock.
The ruling was delivered on Thursday by Judge Paul A. Engelmayer during a tense sentencing hearing at a Manhattan federal court.
Kwon, once celebrated in the tech world as a visionary and dubbed “the cryptocurrency king,” faced emotional testimonies from victims whose lives were shattered by the crash of his Singapore-based company, Terraform Labs.
Many described how the collapse of the TerraUSD “stablecoin” and its paired cryptocurrency, Luna, destroyed family savings, charities, and long-term investments.
The 34-year-old Stanford graduate apologized in court, acknowledging the devastating losses. However, Judge Engelmayer rejected pleas for leniency, calling the government’s recommended 12-year sentence “unreasonably lenient” and Kwon’s request for five years “utterly unthinkable.”
Kwon faced a maximum of 25 years but will serve 15, with credit for the 17 months he spent in detention in Montenegro before his extradition.
“Your offense caused real people to lose $40 billion in real money, not some paper loss,” the judge said, describing the fraud as “epic” and “generational.”
He added that Kwon held an “almost mystical” influence over investors who trusted his assurances that TerraUSD was a safe, stable investment—when in reality, prosecutors said, it was secretly propped up by cash infusions to maintain its $1 peg.
The collapse triggered a chain reaction across the global crypto market, contributing to the downfall of several other major crypto institutions.
Prosecutors noted that the losses from Kwon’s scheme exceeded the combined damages of fraud cases involving FTX founder Sam Bankman-Fried and OneCoin co-founder Karl Sebastian Greenwood.
Several victims relived their trauma during the hearing. One man, speaking by phone, said his wife divorced him, his children abandoned their college plans, and he was forced to move back to Croatia after losing the family’s life savings.
Another victim revealed he convinced hundreds of nonprofit organizations and his in-laws to invest—an outcome he described as a lifelong burden of guilt.
Kwon pleaded guilty in August, agreeing to forfeit more than $19 million as part of his plea deal. His lawyers argued that he acted out of desperation, not greed, but the judge dismissed those claims, insisting the scale and impact of his deception demanded a severe sentence.
Kwon’s request to serve his prison term in South Korea, where his wife and young daughter live and where he still faces prosecution, was also denied.
Despite the hardship described in court, some victims offered forgiveness. Chauncey St. John, whose nonprofit clients lost more than $2 million, said he forgives Kwon and prays for him, even as his own family remains deep in debt.
Kwon remains one of the most controversial figures in cryptocurrency history, and his sentencing marks a major chapter in global efforts to regulate and punish large-scale financial fraud in the digital asset industry.
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