The sentence handed down was even harsher than the prosecution's recommendation of 12 years, while Do Kwon's side had initially only requested 5 years in prison.
Do Kwon was sentenced to 15 years in prison by the US. Photo: Bloomberg
Do Kwon, the founder of Terraform Labs, has just been sentenced to 15 years in prison by a US court for Vai in the collapse of the Terra (LUNA) ecosystem and the UST Algorithmic Stablecoin in 2022, wiping out more than $40 billion in Capital from the crypto market.
After a lengthy trial that lasted from November until now, Judge Paul Engelmayer of the Southern District of New York surprised everyone by handing down a sentence even higher than the 12 years requested by the US prosecution, as well as the defendant's plea for leniency of only 5 years .
According to Engelmayer, Do Kwon chose to lie about what happened and made erroneous decisions throughout the trial. The case caused serious damage to more than a thousand victims, as evidenced by the fact that the presiding judge received 315 letters from people who lost all their assets due to investments in LUNA-UST.
However, the judge allowed the time Kwon spent being extradited to the United States in late December last year, as well as the 17 months and 8 days he was detained in Montenegro, to be included in the calculation of his 15-year prison sentence.
Previously, Kwon was charged by US authorities with nine counts of fraud and deception related to the collapse of LUNA-UST , carrying a maximum sentence of up to 135 years in prison. In August, the Terraform Labs founder changed his testimony and pleaded guilty to charges of conspiracy to commit fraud and wire fraud, while also paying a $19.2 million fine.
In March 2023, after months on the run, Do Kwon was arrested in Montenegro for using a forged passport. The Eastern European nation's authorities then faced internal disputes over jurisdiction and how to handle the case, as well as responding to extradition requests from both the United States and South Korea, both of which were prosecuting him. Montenegro ultimately chose the United States.
Do Kwon is the last name on the list of notorious figures in the crypto industry to be convicted, following former FTX CEO Sam Bankman-Fried (25 years), former Alameda Research CEO Caroline Ellison (2 years), former FTX Director Ryan Salame (7.5 years), and former Celsius CEO Alex Mashinsky (12 years).
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