A federal judge heard statements from victims involved with Terraform Labs and Do Kwon before determining his fate.

In a court hearing held in the Southern District of New York on Thursday, Judge Paul Engelmayer sentenced Kwon to 15 years for his involvement in the project’s collapse, which resulted in a loss of around $40 billion from the cryptocurrency market in 2022. He will receive credit for the time he has already spent in custody.

Before issuing the sentence, Engelmayer listened to testimonies from victims and expressed concerns about Kwon’s legal prospects in South Korea, where he also faces charges.

Kwon expressed remorse, stating, “I have spent all my time thinking about what I could have done, and what I can do. It’s been four years since the crash, three years since I’ve seen my family. I’d like to [do] my penance in my home country.”

Engelmayer reportedly deemed the 12-year sentence recommended by prosecutors as excessive, while five years proposed by Kwon’s defense was deemed implausible.

He warned future fraudsters, saying, “If you commit fraud, you will lose your liberty for a long time as you will here.”

The judge added, addressing Kwon:

“Your fraud was unusually serious. For four years you publicly lied to the market. The investors were taking a risk, but they were not taking the risk of being a fraud victim… What makes what you did so despicable is that you traded on trust."

Kwon may be extradited to South Korea to serve the remainder of his sentence after seven and a half years, where additional charges could add up to 40 more years in prison.

Victims Speak Out

Prosecutors revealed there were about 16,500 victims affected by the Terraform collapse. Six victims shared their experiences via phone during the hearing, recounting significant financial losses. One victim, Tatiana Dontsova, remarked:

“I sold my apartment in Moscow to invest with Do Kwon. $81,000 turned into $13 in the palm of my hand. I am now officially homeless."

Kwon faces additional legal battles, having been extradited to the US from Montenegro in December 2024, with his legal proceedings being delayed by challenges in the Montenegrin courts.

As Kwon begins his lengthy prison term, he joins a growing list of former cryptocurrency executives who have faced serious legal consequences in the US.