Do Kwon has been sentenced to a 15-year prison term. The South Korean crypto entrepreneur, who co-founded Terraform Labs, was sentenced in a New York Federal Court on Thursday for his role in the collapse of the $40 billion Terra LUNA ecosystem, which triggered the 2022 crypto selloff.
After years of litigation in several jurisdictions, U.S. District Judge Paul A. Engelmayer handed down the sentence at a hearing in Manhattan. As such, Kwon is expected to serve half of his sentence in South Korea.
The prosecutor had previously requested the court to hand Kwon a 12-year sentence. However, the attorneys representing Kwon had asked Judge Engelmayer not to impose a sentence of more than 5 years.
The former crypto idol, at 34 years, pleaded guilty to two counts including conspiracy to defraud and wire fraud. Notably, Terraform previously agreed to pay an $80 million civil fine while Terraform reached a $4.55 billion settlement with the United States Securities and Exchange Commission (SEC).
The sentencing of Kwon is a major relief to the wider crypto market amid the ongoing legalization in the United States under President Donald Trump. The sentencing sends a clear message that crypto leaders must act responsibly and not hide crucial information from investors.
Meanwhile, Terra LUNA and Terra Classic LUNC dropped over 10% on Thursday to trade at about $.0177 and $0.00005281 respectively at press time. The sentencing of Do Kwon also impacted the TerraClassicUSD (USTC), as it dropped more than 20% to trade at about $0.00899 at press time.
