Kwon Do-hyung, the man behind the "Terra" scandal, has been sentenced to 15 years in prison by a US court.

The court sentenced Kwon Do-hyung (34), founder of Terraform Labs, who is on criminal trial in the United States on charges of fraud related to the issuance of the algorithmic stablecoin TerraUSD (UST), to 15 years in prison.

Judge Paul Engelmayer of the Southern District of New York sentenced Mr. Kwon, who was charged with fraud and other charges, at a sentencing hearing held on the 11th (local time). Mr. Kwon had previously pleaded guilty in August to conspiracy to commit fraud and network fraud, and had proceeded directly to sentencing proceedings without a guilty verdict hearing.



The U.S. prosecutors sought a maximum sentence of 12 years in prison based on a plea bargain with Kwon, contingent on his guilty plea. Kwon's attorneys argued that the sentence should not exceed five years, considering his detention in Montenegro and the additional criminal charges he faces in South Korea. However, the court ultimately imposed a higher sentence than the prosecutors had requested. Kwon will also be ordered to recover $19 million (approximately 27.9 billion won) and other assets.

In March 2023, following Kwon's arrest in Montenegro, U.S. federal prosecutors indicted him on eight charges, including securities fraud, wire fraud, commodity fraud, and conspiracy to manipulate prices. After his extradition to the United States, a charge of conspiracy to commit money laundering was also added. If convicted on all nine counts, Kwon could face up to 130 years in prison.

Mr. Kwon pleaded not guilty to all nine charges immediately after his extradition to the United States, but abruptly changed his position in August and pleaded guilty to two counts, including conspiracy to commit fraud and fraud using a telecommunications network. Prosecutors agreed to a plea deal, stipulating that the U.S. Department of Justice would not oppose Mr. Kwon's application for international prisoner transfer after he served half of his sentence in the U.S. Therefore, there is a possibility that he could be extradited to Korea at his own request.

In addition to his criminal trial in the United States, Mr. Kwon is also being indicted in Korea on charges of violating capital market laws. After being arrested in Montenegro, he fought a legal battle, insisting he should be extradited to Korea rather than the United States, and was ultimately extradited to the United States.

Terraform Labs, when issuing the stablecoin UST, claimed that its value was pegged to the US dollar through an algorithmic structure linked to the price of the cryptocurrency LUNA. However, contrary to Terraform Labs' claims, the dollar-pegging was broken, resulting in approximately $40 billion (approximately 59 trillion won) in investor losses.

Reporter Kim Jeong-woo