A U.S court on Thursday sentenced cryptocurrency entrepreneur Do Kwon to 15 years in prison for fraud linked to the collapse of his company, Terraform Labs, which wiped out $40 billion of investors’ money and sent shockwaves through global crypto markets.
Kwon, 34, who created the digital currencies TerraUSD and Luna, pleaded guilty in August after an international manhunt spanning Asia and Europe.
He still faces fraud charges in his native South Korea.
TerraUSD was marketed as a “stablecoin,” pegged to assets such as the U.S. dollar to prevent extreme fluctuations.
Kwon successfully promoted it as the next big cryptocurrency, attracting billions in investments and international attention.
In 2019, he was named in Forbes’ 30 under 30 Asia list and celebrated as a “genius” in South Korean media.
However, in May 2022, TerraUSD and Luna collapsed, leading many experts to call the scheme a sophisticated pyramid scam that destroyed investors’ life savings.
Kwon had fled South Korea before the collapse and spent months evading authorities.
In March 2023, he was arrested at Podgorica Airport, Montenegro, with a fake Costa Rican passport while attempting to fly to Dubai.
He was extradited to the U.S. last year.
Following his sentencing, U.S prosecutors described how Kwon had deliberately misled investors, including American firms, to inflate the value of his cryptocurrencies for personal gain.
At the market’s peak in spring 2022, TerraUSD and Luna were valued at over $50 billion.
“Do Kwon devised elaborate schemes to mislead investors and inflate the value of Terraform’s cryptocurrencies for his own benefit,” said U.S. Attorney Jay Clayton.
Alongside the prison sentence, Kwon must forfeit over $19 million in illicit profits.
The Justice Department indicated he may serve part of his sentence in South Korea if at least half is completed in the U.S.
