Kwon Do-hyung sentenced to 15 years in prison for his role in the Terra collapse.

NY Court – Medium sentence in Terra fraud case

The U.S. District Court for the Southern District of New York announced on the 12th that it had sentenced Terraform Labs co-founder Kwon Do-hyung to 15 years in prison after pleading guilty to wire fraud and conspiracy to commit wire fraud. The sentence, a judicial ruling on the collapse of the Terra ecosystem that resulted in approximately $4 billion in losses in 2022, will be reduced by Kwon's time served in the U.S. and 17 months of detention in Montenegro.

After hearing hours of victim statements before sentencing, Federal Judge Paul Engelmayer noted, "Kwon Do-hyung's fraud is exceptionally egregious, and he publicly lied to the market for four years." The judge emphasized, "What makes your fraud so despicable is that you traded on investor trust," and called the prosecution's request for a 12-year sentence an understatement. He dismissed the defense's request for a five-year sentence as "unrealistic."

Before sentencing, Kwon Do-hyung said, "I've been reflecting on the past and thinking about what I've done and what I could have done better," and added, "I want to live in my hometown and fulfill my responsibilities." He is expected to be extradited to South Korea after serving approximately seven and a half years, where he faces a maximum sentence of 40 years. The judge delivered a strong warning: "To the next Kwon Do-hyung, if you commit fraud, you will lose your freedom for this long."

Prosecutors reported to the court that the Terra collapse had affected approximately 16,500 people, six of whom were given the opportunity to speak before sentencing and directly disclosed the extent of their losses. Victim Tatiana Dontsova said, "I sold my Moscow apartment to invest, but $81,000 has now been reduced to $13. I am now officially homeless."

After being arrested in Montenegro, Kwon Do-hyung resisted extradition to the United States for months, delaying extradition proceedings, but was finally handed over to US authorities in December of last year. With this ruling, he becomes another former cryptocurrency executive to receive a lengthy sentence. Former FTX CEO Sam Bankman-Fried received a 25-year prison sentence, former Celsius CEO Alex Mashinsky received a 12-year sentence, and former Binance CEO Changpeng Zhao received a four-month sentence before being pardoned by US President Donald Trump.

Reporter Jeong Ha-yeon yomwork8824@blockstreet.co.kr