Sentencing of Do Kwon
Later today, December 11, Do Kwon, the former head of Terraform Labs, will receive his sentencing in Manhattan, presided over by U.S. District Judge Paul Engelmayer. Kwon, 33, who previously fled from justice, entered a guilty plea in August on multiple counts of fraud, which include conspiracy to commit commodities fraud, securities fraud, and wire fraud. In his admissions, he acknowledged misleading investors with false representations regarding his company’s blockchain offerings.
Background and Arrest
His dramatic escape from law enforcement came to an end in March 2023 when he was apprehended in Montenegro while holding a forged passport. Following his arrest, he was extradited to the United States in December 2024 after traversing through locations such as the United Arab Emirates and Singapore.
Impact of Fraudulent Activities
Kwon’s fraudulent activities are linked to the cataclysmic collapse of the TerraLUNA/UST ecosystem in 2022, which resulted in catastrophic financial losses totaling around $40 billion for investors. This incident reverberated throughout the cryptocurrency landscape, severely affecting entities like the now-defunct crypto exchange FTX and crypto lending giant Celsius. Unlike stablecoins like Tether’s USDT or Circle’s USDC that have traditional assets backing their value, Terra’s UST was touted as an “algorithmic stablecoin,” lacking such financial foundations.
Prosecution and Defense Arguments
As outlined by AP News, federal guidelines usually suggest a prison sentence of approximately 25 years for crimes of this caliber. However, in documents submitted earlier this month, prosecutors are advocating for a 12-year sentence, considering Kwon’s guilty plea, his previous detention in Montenegro, and impending charges he faces back in South Korea.
“I alone am responsible for everyone’s pain,”
Kwon stated in a letter aimed at the judge, reflecting on his actions with a sense of accountability. He further expressed regret, stating,
“My misrepresentations stemmed from arrogance that I now deeply regret.”
In mitigation of his case, Kwon’s defense team has requested a reduced sentence of five years, arguing that his motivations were rooted more in hubris and desperation than in greed. Additionally, Kwon is expected to surrender $19.3 million and some of his properties under the terms of his plea agreement.
Comparative Sentences in Cryptocurrency Sector
The length of prison sentences among high-profile figures in the cryptocurrency sector has varied greatly. For instance, Sam Bankman-Fried, the founder of FTX, was sentenced to 25 years for his crimes in March 2024, while Celsius CEO Alex Mashinsky received a 12-year sentence in May 2025. In a noteworthy case, Binance’s Changpeng Zhao faced a four-month sentence due to deficiencies in compliance with anti-money laundering laws in April 2024, only to be pardoned by President Donald Trump in October 2025.
