Crypto Downfall: A 15-Year Sentence for Terraform's Co-Founder
Do Kwon, the co-founder of Terraform Labs, has been sentenced to 15 years in prison. This comes after he admitted to wire fraud and conspiracy to defraud. The judge in New York made this decision after hearing from people who lost money because of Kwon's actions.
The Collapse of Terraform Labs
The collapse of Terraform Labs in 2022 wiped out about $40 billion from the crypto market. Judge Paul Engelmayer considered the impact on victims before deciding on the sentence. Kwon will get credit for time already served in the US and 17 months in custody before his extradition.
Kwon's Regret and Sentencing
Before the sentence was announced, Kwon spoke about his regret. He said he had been thinking about what he could have done differently. He also mentioned wanting to serve his time in his home country, South Korea.
The judge thought the 12-year sentence suggested by prosecutors was too harsh. He also believed the five-year sentence requested by Kwon's lawyers was too lenient. The judge warned Kwon that if he had not pleaded guilty, the sentence would have been even longer.
The Severity of Kwon's Fraud
Kwon's fraud was called unusually serious. The judge pointed out that Kwon had lied to the market for four years. Investors took risks, but they did not expect to be victims of fraud. The judge said Kwon's actions were despicable because he betrayed trust.
Potential Additional Sentencing in South Korea
After serving seven and a half years in the US, Kwon could be sent to South Korea. There, he might face up to an additional 40 years in prison. Prosecutors mentioned that about 16,500 people were affected by the collapse of Terraform.
Victims' Stories
During the hearing, six victims shared their stories. One victim, Tatiana Dontsova, said she sold her apartment to invest with Kwon. She ended up losing most of her money and became homeless. Kwon's legal team had delayed proceedings for months, but he was eventually handed over to US authorities.
Other High-Profile Crypto Cases
Kwon is not the only high-profile crypto executive to face legal consequences:
- Former FTX CEO Sam Bankman-Fried is serving a 25-year sentence.
- Former Binance CEO Changpeng Zhao served four months but was later pardoned.
- Former Celsius CEO Alex Mashinsky was sentenced to 12 years.
