Harsh Sentence: Do Kwon Sentenced to 15 Years After Cryptocurrency Empire Collapse

Kwon had previously agreed to forfeit more than $19 million.                                                

Harsh Sentence.. Do Kwon Sentenced to 15 Years After Cryptocurrency Empire Collapse

A U.S. court on Saturday sentenced cryptocurrency mogul Do Kwon to 15 years in prison for defrauding investors who lost billions when his company's cryptocurrency ecosystem collapsed in 2022.

The sentence, handed down by a federal judge in New York City, comes after Kwon pleaded guilty in August to fraud charges stemming from the collapse of his company Teraform Labs' $40 billion cryptocurrency.

The company promoted its cryptocurrency, TeraUSD, as a reliable "stablecoin"—a type of currency typically pegged to stable assets to prevent large price fluctuations. But prosecutors say it was all a mirage that collapsed, devastating investors and triggering a "series of crises that swept through the cryptocurrency markets," according to the Associated Press.

Kwon previously agreed to forfeit more than $19 million, which authorities said reflected illicitly acquired proceeds, as part of a plea deal. He faced charges in both South Korea and the United States in connection with the collapse of TerraUSD, a platform owned by Singapore-based Terraform, which rocked the cryptocurrency world in the spring of 2022 and contributed to the crash of the FTX cryptocurrency exchange.

Teraform and Kwon, who owned 92% of the company, were convicted of civil fraud in a 2024 lawsuit filed by the U.S. Securities and Exchange Commission. A New York jury, at the end of a two-week trial, concluded that Kwon and Terraform misled investors—a negative sign for the former cryptocurrency tycoon's chances of overturning the criminal charges against him.