A New York court has sentenced cryptocurrency figure Do Kwon to 15 years in prison for fraud tied to the collapse of his company, a disaster that wiped out $40 billion in investor money and sent shockwaves through the global crypto market.
Kwon, who once promoted himself as a visionary in digital finance, pleaded guilty in August after an international chase that stretched across Asia and Europe. Even after this conviction, he still faces separate fraud charges back home in South Korea.
Kwon, now 34, was the co-founder of Terraform Labs, the company behind TerraUSD, a so-called stablecoin that was marketed as being safely tied to the US dollar. He sold the idea as the next big thing in crypto, pulling in billions of dollars and earning global hype. South Korean media even called him a “genius,” and in 2019 he landed on Forbes’ 30 Under 30 Asia list.
But in May 2022, everything collapsed. TerraUSD and its sister token, Luna, fell into a rapid meltdown. Many experts later said the entire setup looked like a glorified pyramid scheme — and thousands of investors lost their savings.
Kwon had already left South Korea before the crash and spent months evading authorities. He was finally arrested in March 2023 at an airport in Podgorica, Montenegro, trying to board a flight to Dubai with a fake Costa Rican passport. He was later extradited to the United States.
After Thursday’s sentencing, US prosecutors explained how Kwon misled buyers and investment firms with false claims about his technology. At their peak, TerraUSD and Luna were worth more than $50 billion combined.
US Attorney Jay Clayton said Kwon used “elaborate schemes” to inflate the value of his tokens for his own gain. Prosecutors also revealed that after the collapse, Kwon tried to seek “political protection” from multiple countries. In one recorded conversation, he even told an associate that his plan for dealing with investigators was to “tell them to fuck off.”
Besides the prison sentence, Kwon must forfeit more than $19 million made from his illegal activities. Officials say he might be allowed to finish his sentence in South Korea, but only after completing at least half of it in the United States.
The case adds to growing pressure on the crypto industry, which has seen several major scandals and collapses in recent years. Many observers compare Kwon’s dramatic rise and fall to that of Elizabeth Holmes, the disgraced founder of Theranos.
