sentenced

Do Kwon, the brash entrepreneur whose Terra blockchain vaporized more than $40 billion when it collapsed in spectacular fashion nearly four years ago, was sentenced to 15 years in prison on Thursday.

In August, Kwon struck a deal with prosecutors and pleaded guilty to two counts of fraud. Though he faced a maximum sentence of 25 years in prison, prosecutors sought only 12.

Kwon’s attorneys asked Judge Paul Engelmayer to show even greater leniency, requesting a mere five years in prison. They cited the likelihood Kwon would receive a separate, lengthy prison sentence in his native South Korea as one of several reasons for a reduced sentence.

That would have been “utterly unthinkable and wildly unreasonable” given the magnitude of Kwon’s crimes, Engelmayer said on Thursday.

“This was a fraud on an epic, generational scale,” the judge said as Kwon, clad in a canary-yellow jumpsuit, sat impassive.

Terra investors, possibly more than 1 million of them, lost an estimated $40 billion when Terra collapsed in May 2022.

“Those are hard facts. They demand a very long sentence,” Engelmayer said.

Kwon’s sentencing could mark the conclusion of the legal battles that erupted in the wake of Terra’s collapse.

The blockchain’s failure shook the crypto industry to its foundations. Crypto prices collapsed and several multibillion-dollar businesses filed for bankruptcy, including crypto lender Celsius, hedge fund Three Arrows Capitol, and, most notably, crypto exchange FTX.

Their failures revealed those businesses to have been built on fraud, and their founders are either in prison or in hiding.

Kwon successfully eluded arrest for months, but he was ultimately found attempting to flee Montenegro for the United Arab Emirates — a country that does not have extradition treaties with the US or South Korea — using fake passports.

A lengthy tug-of-war ensued between the US and South Korea. The US ultimately prevailed, and Kwon was charged with nine counts of fraud that carried a maximum penalty of 130 years in prison.

At first, the entrepreneur pleaded not guilty. His criminal trial was set to begin in January 2026.

This is a developing story. Please return for updates.

Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.