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- Do Kwon received a 15-year U.S. prison sentence for fraud tied to TerraUSD's 2022 collapse

- The sentence exceeded prosecutors' request and followed victim testimony on financial losses

- Kwon may seek transfer to South Korea after serving half his sentence in U.S. custody

Terraform Labs co-founder Do Kwon has been sentenced to 15 years in federal prison for fraud tied to the collapse of the TerraUSD stablecoin, a failure that erased an estimated $50 billion from the crypto market in May 2022. The ruling was delivered on Wednesday by U.S. District Judge Paul Engelmeyer in the Southern District of New York.

Judge Engelmeyer imposed a term longer than the 12 years sought by federal prosecutors and far above the five-year sentence requested by Kwon's defense team. Under the terms of the judgment, Kwon must serve at least half of his sentence before becoming eligible to apply for a transfer to South Korea, where he may face additional legal proceedings.

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The decision followed an extended sentencing hearing that included testimony from victims, some of whom appeared in court while others participated by phone. Their statements focused on financial and personal losses linked to the Terra ecosystem's collapse.

Guilty Plea and Fraud Admissions

Kwon pleaded guilty in August to two federal charges: conspiracy to commit commodities fraud, securities fraud, and wire fraud, and a separate count of wire fraud. During his plea hearing, he acknowledged knowingly misleading investors who purchased TerraUSD, Terraform Labs' algorithmic stablecoin.

The guilty plea narrowed the scope of the case. Prosecutors initially charged Kwon with nine criminal counts, which carried a potential combined sentence of up to 135 years in prison. As part of a plea agreement, the indictment was reduced to two counts, lowering the statutory maximum to 25 years.

Transfer Concerns and Foreign Custody

Ahead of sentencing, Judge Engelmeyer raised concerns about whether a future transfer to South Korea could result in Kwon serving less than his full U.S. sentence. The court sought clarification on any pending charges overseas and assurances that Kwon would not be released early if transferred.

In a written filing submitted Wednesday, prosecutors said South Korean authorities had not disclosed details about potential penalties but indicated that Kwon would contest any charges there.

The filing also addressed Kwon's prior detention in Montenegro, where he was held for approximately 17 months before being extradited to the United States in January. According to prosecutors, the Bureau of Prisons will credit Kwon for time spent in Montenegrin custody beyond a four-month sentence related to passport fraud, though the precise amount of credit has not been determined.