Kwon pleaded guilty in August to conspiracy to defraud and wire fraud charges stemming from the collapse of Terraform in 2022. The firm unravelled after the TerraUSD stablecoin was de-pegged from the US dollar, prompting it and Terraform’s other tokens to plummet to close to zero in value, leading to billions of dollars of losses.Before that, in 2021, Kwon is accused of misleading investors about a previous fall in TerraUSD’s value. Kwon claimed that a computer algorithm had restored the stabelcoin’s value when, in reality, he had arranged for a high-frequency trading firm to buy up millions of dollars of the coin to prop it up.Pleading guilty in August, Kown said: "I made false and misleading statements about why it regained its peg by failing to disclose a trading firm’s role in restoring that peg...What I did was wrong."Judge Paul Engelmayer sentenced Kwon to 15 years in prison, despite prosecutors only asking for a minimum of 12, telling Kown: “Your offense caused real people to lose $40 billion in real money, not some paper loss.”In court, Kwon apologised to victims, including hundreds who submitted letters describing the impact of the losses that they suffered.

The prison sentence comes a year after Kwon and Terraform also reached a $4.5 billion settlement with the SEC after a jury verdict held them liable for the fraud.

Terra’s implosion was far-reaching, setting off a series of devastating events for the crypto industry, causing the failure of crypto hedge fund Three Arrows Capital which, in turn, hit Genesis Global Capital and FTX.