Do Kwon, the South Korean cryptocurrency entrepreneur behind one of the biggest financial disasters in recent history, has been sentenced to 15 years in prison after his two digital coins collapsed in 2022, wiping out an estimated $40 billion and devastating up to a million investors worldwide.
The Manhattan federal court handed down the sentence on December 11, with US District Judge Paul Engelmayer describing the case as involving fraud at an “epic, generational scale.” The judge rejected recommendations from both prosecutors, who sought 12 years, and the defence team, who requested five years, and decided on a 15-year sentence.
The severity of the sentence underscores how catastrophically Kwon’s deception damaged investors worldwide. Following this scandal and other major crypto failures, many investors have become far more cautious about where they store their digital assets. Many individuals look for Top Anonymous Crypto Wallets that prioritize privacy and security features, wanting to ensure their funds remain protected independently of any single platform or entrepreneur’s control.
Kwon pleaded guilty in August to wire fraud and conspiracy to commit fraud, acknowledging that he had misled investors about how his stablecoin, TerraUSD, maintained its value. When TerraUSD began to fall below its intended $1 value in May 2021, Kwon secretly coordinated with a high-frequency trading firm to artificially purchase massive amounts of the token to prop up its price, while telling investors that an algorithm called Terra Protocol was handling everything automatically.
The Collapse That Triggered Industry-Wide Devastation
In May 2022, the entire scheme unraveled within days. Large sellers began dumping TerraUSD, causing it to lose its $1 peg and triggering panic across the market. As investors rushed to withdraw their funds, the collapse of Luna – the sister cryptocurrency linked to TerraUSD – followed immediately after.
The damage rippled far beyond Kwon’s companies. The collapse contributed to the downfall of major crypto lending firms, including BlockFi, Voyager Digital, and Genesis, and indirectly triggered the later collapse of the FTX exchange.
Kwon attempted to flee after the collapse, eventually being captured in Montenegro in March 2023 while attempting to board a flight to Dubai using a fake passport. He was extradited to the United States to face charges that originally included nine counts, though his guilty plea allowed prosecutors to dismiss seven of them.
Investor Stories and Restitution
During the sentencing hearing, victims described devastating personal consequences, with excerpts read from some of the more than 300 letters. One investor had placed $190,000 of his family’s life savings into TerraUSD and saw his investment plummet to $13,000. Judge Engelmayer emphasized that the combined losses from this fraud exceeded those from the FTX and OneCoin scandals combined.
As part of his sentence, Kwon was ordered to forfeit more than $19 million and make restitution to victims through bankruptcy proceedings. South Korea is also pursuing him on similar charges, where prosecutors have indicated they could seek a 40‑year sentence if he is convicted there. His plea arrangement leaves open the possibility that he could request a transfer to serve the remainder of his sentence in South Korea after completing at least half of his prison term in the United States.
