Terraform Labs co-founder Do Kwon has been sentenced to 15 years in prison by a U.S. court after pleading guilty to wire fraud and conspiracy. The collapse of Terraform in 2022 wiped out an estimated $40 billion from the crypto market. Judge Paul Engelmayer called the fraud "unusually serious," stating that Kwon "publicly lied to the market" for years. Kwon expressed remorse and requested to serve his sentence in South Korea, where he may face additional charges and up to 40 more years in prison. Approximately 16,500 victims were affected, with several testifying about severe financial losses during the sentencing. Kwon is the latest high-profile crypto executive to be convicted, following cases like FTX's Sam Bankman-Fried and Celsius' Alex Mashinsky.

<html><head></head><body>Do Kwon, the co-founder of Terraform Labs, has been sentenced to 15 years in prison after pleading guilty to wire fraud and conspiracy to defraud.In a Thursday hearing in the US District Court for the Southern District of New York, Judge Paul Engelmayer ordered that Kwon serve 15 years in prison for his role in the collapse of Terraform, which wiped out about $40 billion from the crypto market in 2022. Prior to making his decision on sentencing, Engelmayer heard from some of Terraform’s victims and questioned what kind of justice Kwon might face in his native South Korea, where authorities are also building a case against him.“I would like everyone to know that I have spent all my time thinking what I could have done, and what I can do,” said Kwon prior to his sentencing, according to Inner City Press. “It’s been four years since the crash, three years since I’ve seen my family. I’d like to [do] my penance in my home country.”<template data-buzzsprout-episode-id="18267105" data-buzzsprout-podcast-id="2040516" data-ct-widget="buzzsprout"></template>Engelmayer reportedly said the 12-year recommendation US prosecutors had requested the court impose on Kwon was “unreasonable,” while the five years requested by the co-founder’s lawyers “would be so implausible it would require appellate reversal.”“To the next Do Kwon, if you commit fraud, you will lose your liberty for a long time as you will here,” said Engelmayer, according to Inner City Press. “You have been bitten by the crypto bug, and I don’t think that’s changed. You must be incapacitated. If not for your guilty plea, my sentence would have been higher.”The judge added, addressing Kwon:<blockquote>“Your fraud was unusually serious. For four years you publicly lied to the market [...] The investors were taking a risk, caveat emptor. But they were not taking the risk of being a fraud victim... What makes what you did so despicable is that you traded on trust.”</blockquote>Kwon could be extradited to South Korea after serving seven and a half years, where he may complete the second half of his US sentence. He could face up to an additional 40 years in prison in his native country.<h2>Several victims have their say during the sentencing hearing</h2>Prosecutors said at the sentencing hearing that there were about 16,500 victims from the collapse of Terraform, according to claims in the company’s ongoing bankruptcy case. Six of them were allowed to address the court via phone before Engelmayer’s decision, describing their financial losses due to Terra. “I sold my apartment in Moscow to invest with Do Kwon,” said Tatiana Dontsova, one of the victims, according to Inner City Press. “I moved to Tbilisi. $81,000 turned into $13 in the palm of my hand. Kwon came up with Luna 2, calling it LUNC. He is not showing any responsibility for those who invested. I am now officially homeless.”Related: US judge asks for clarification on Do Kwon’s foreign chargesKwon, alleged to have had a role in the 2022 collapse of the Terra ecosystem, was handed over to US authorities in December 2024 after his extradition from Montenegro. His legal team delayed proceedings for months by presenting various challenges in the Montenegrin courts.<iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="315" loading="lazy" src="https://www.youtube.com/embed/e2bNjdebVSA?start=" width="100%"></iframe>With Kwon expected to be in prison for years, the Terraform co-founder became the latest former high-profile cryptocurrency executive to enter a plea deal or be found guilty in US courts. Former FTX CEO Sam Bankman-Fried is serving a 25-year sentence, former Binance CEO Changpeng Zhao served four months — though was later pardoned by US President Donald Trump — and former Celsius CEO Alex Mashinsky was sentenced to 12 years.Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice<template data-ct-non-breakable="undefined" data-name="subscription_form" data-type="markets_outlook" label="Subscription Form: Markets Outlook"></template></body></html>

Terraform co-founder sentenced to 15 years in prison after guilty plea

cointelegraph

Terraform Labs co-founder Do Kwon has been sentenced to 15 years in prison after pleading guilty to wire fraud and conspiracy. His criminal actions were central to the 2022 crypto market crash, which erased nearly $40 billion in market value. The judge considered victim impact statements, including one individual who became homeless after losing $81,000. The sentence was deemed necessary due to the severity and deliberate nature of the fraud. Kwon expressed remorse and may serve part of his sentence in South Korea, where he could face additional charges. His case is compared to other high-profile crypto fraud sentences.

<html><head></head><body>Do​‍​‌‍​‍‌​‍​‌‍​‍‌ Kwon, co-founder of Terraform Labs, was sentenced to 15 years in federal prison after he pleaded guilty to wire fraud and conspiracy charges. The decision of Thursday, Judge Paul Engelmayer, directly relates to Kwon’s criminal activities that caused the 2022 crypto crash that resulted in a loss of almost $40 billion of market cap. 
Kwon will be allowed time off from his sentence for the period he has already been in custody in the U.S. and for the 17 months during which he was detained in Montenegro before his transfer, which is expected to take place in December 2024. 
<h3 class="wp-block-heading" id="h-victims-share-impact-of-financial-losses">Victims Share Impact of Financial Losses</h3>
To​‍​‌‍​‍‌​‍​‌‍​‍‌ decide on the sentence, Judge Engelmayer listened to the stories of six victims, who spoke out among the roughly 16,500 people whose Kwon’s actions had affected. Tatiana Dontsova said that she had sold her Moscow apartment in order to invest with Kwon, but she ended up losing $81,000 and becoming homeless after her investment went down. 
The judge found both the prosecution’s proposal of 12 years and the defense’s suggestion of 5 years insufficient to the severity and extent of the crime. Engelmayer pointed out that one of the reasons why Kwon’s fraud was so terrible was the fact that he deliberately misled the same group of investors whom he had gained their trust over a period of four years. 
The judge cautioned the next generation of cryptocurrency entrepreneurs that if they commit fraud, they will be given hefty prison sentences and will lose their personal freedom for long ​‍​‌‍​‍‌​‍​‌‍​‍‌periods.
Reports​‍​‌‍​‍‌​‍​‌‍​‍‌ say Kwon might be sent back to South Korea to serve the rest of his prison time after only half of his sentence, and there, additional charges could increase his jail time by 40 years. His situation is compared to various celebrities’ stories of cryptocurrency-related crimes, such as Sam Bankman-Fried getting 25 years in prison and Alex Mashinsky being sentenced to 12 years for similar crimes. 
At the hearing, Kwon apologized, saying he has thought over his actions for a long time and he is devastated by the fact that investors have suffered. The Terraform co-founder recalled being away from his family for three years and said that he would like to serve his sentence in his country.
Judge Engelmayer remarked that without Kwon’s plea of guilty and his cooperation with the investigation by the federal authorities, his sentence would have been ​‍​‌‍​‍‌​‍​‌‍​‍‌longer.
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