12/12/2025, 11:0312/12/2025, 11:03
Digital currency entrepreneur Do Kwon has been sentenced to 15 years in prison following a $40 billion collapse of his business. New York judge Paul Engelmayer spoke of a fraud of epic proportions.
Do Kwon was convicted.Image: AP
As US media reported from the courtroom, the sentence went beyond the prosecutor’s request, which had called for 12 years in prison.
Kwon, now 34, created the linked cryptocurrencies Terra and Luna at the company Terraform Labs in Singapore. However, the Terra-Luna system collapsed spectacularly in May 2022. Investors came away empty-handed. Kwon admitted at trial that he had concealed Terraform’s financial problems. He had assured until the end that the system was secure. US investors were also affected by the fraud.
The bankruptcy triggered a chain reaction in the digital currency business. The prosecution argued that Kwon also contributed to the collapse of the cryptocurrency exchange FTX. FTX founder Sam Bankman-Fried is currently serving a 25-year prison sentence.
False passport in Montenegro
Kwon apologized to investors in court. He and his business partner Hon Chand Yun were arrested in Montenegro’s capital Podgorica in March 2023 while trying to fly from there to Dubai on fake Costa Rican passports. Montenegro then received extradition requests from both the USA and South Korea. After a long legal tug-of-war, Kwon was finally deported to the USA in 2024. He is also accused of fraud in South Korea.
Police officers escort South Korean crypto mogul Do Kwon in Podgorica, Montenegro on May 11, 2023.Image: EPA
President Donald Trump, whose family is active in the crypto coin business, led the US government on a more friendly course towards digital currencies. He also pardoned the founder of the digital currency exchange Binance, Changpeng Zhao, who was convicted of violating money laundering laws. Although he had already served his four-month prison sentence, the subsequent pardon opens the door for him to potentially be active in the industry again. (sda/dpa)