Terraform Labs co-founder Do Kwon was sentenced to 15 years in federal prison on Thursday for orchestrating a $40 billion cryptocurrency scam — a significantly lighter sentence than the 25 years given to FTX founder Sam Bankman-Fried (SBF) last year, even though Kwon's scam caused nearly four times the financial loss.
This difference in sentencing demonstrates that attitude in court, remorse, and cooperation with authorities can strongly influence outcomes in major financial cases.
Conclude
Judge Paul Engelmayer of the Southern District of New York described the collapse of Terra-Luna as “a massive and unprecedented fraud.” He rejected the prosecutors’ recommendation for a 12-year sentence as “too lenient,” and also dismissed the defense’s request for 5 years as “completely unacceptable and utterly absurd.”
"His actions have caused many people to actually lose $40 billion in real money, not just money on paper," Judge Engelmayer told Kwon, noting that there may have been as many as one million victims worldwide.
Conversely, Judge Lewis Kaplan sentenced SBF to 25 years in prison in March 2024 for the $11 billion fraud, emphasizing that SBF had an "exceptionally flexible ability to lie" and "almost no remorse."
Why is there a difference?
Pleading guilty versus going to court
Kwon pleaded guilty in August 2025 to charges of conspiracy and electronic fraud, admitting responsibility for misrepresenting investor information related to TerraUSD's stabilization mechanism. In a letter to the court, he wrote: “I am solely responsible for everyone’s suffering. The community trusted me to lead them in the right direction, but I, due to my arrogance, led them astray.”
Meanwhile, SBF chose to go to court and consistently maintained his innocence. He argued that FTX was simply " liquidation" and not fraudulent. However, the jury took only four hours to find him guilty of all seven charges.
Courtroom etiquette
Judge Kaplan found that SBF had lied at least three times during the trial. He remarked that SBF's testimony in court was the most evasive he had seen in his nearly 30 years as a judge. "When he wasn't lying outright, he was giving evasive, roundabout, and convoluted answers to every question," Kaplan stated.
The judge also determined that SBF had attempted to influence witnesses before the trial. He had previously texted Ryne Miller, the former general counsel of FTX, suggesting they "review everything together."
Meanwhile, Kwon listened to the victims' letters of Chia — as many as 315 letters were sent to the court — and personally apologized. “Hearing the victims Chia their stories was truly heartbreaking and reminded me of the immense losses I have caused,” Kwon told Judge Engelmayer.
Future legal risks
A key factor in Kwon's sentencing was that he was still awaiting trial in South Korea, and the potential sentence could be up to 40 years in prison. Judge Engelmayer took this into account when determining the sentence. It is highly likely that Kwon will be extradited to South Korea to continue his trial after completing his sentence in the United States.
SBF does not face similar legal risks overseas, so the 25-year sentence in the US is his primary punishment. However, SBF is actively appealing to overturn the verdict. In November 2025, SBF's legal team filed an appeal , arguing that he was found guilty even before the trial began. Lawyer Alexandra Shapiro argues that the court failed to allow crucial evidence proving FTX's solvency and treated him unfairly throughout the trial. The appeals court is expected to take several months to deliver its ruling.
| Do Kwon | Sam Bankman-Fried | |
| The verdict | 15 years | 25 years |
| Total estimated damage | 40 billion USD | 11 billion USD |
| Plead guilty or go to trial? | Confession | Sentencing after trial |
| Remorse | We have apologized to the victim. | No remorse shown |
| Permission | Do not have | Identified 3 times |
| Witness intervention | Do not have | Have |
| Additional legal risks | It can withstand up to 40 more years in South Korea. | Do not have |
The overall picture
Both cases represent a major milestone in addressing illegal activities in the cryptocurrency sector. Prosecutors emphasized that the damage caused by Kwon was greater than that caused by SBF, OneCoin co-founder Karl Sebastian Greenwood, and former Celsius CEO Alex Mashinsky combined.
The trial results send a clear message to the cryptocurrency industry: cooperating with authorities and showing genuine remorse can significantly reduce prison sentences.
Kwon agreed to pay back $19.3 million under a plea deal. He was also fined an additional $80 million and banned from trading cryptocurrency for life under a settlement agreement with the SEC scheduled for 2024.
His request to serve his sentence in South Korea was denied.
