Former Terraform Labs CEO Kwon Do-hyung indicted in U.S.

The U.S. Attorney's Office for the Southern District of New York has filed an eight-count indictment against Kwon Do-hyung, the former CEO of Terraform Labs, for his role in the May 2022 collapse of TerraUSD and Luna tokens. If convicted on all charges, Kwon could face a maximum sentence of over 100 years in prison.

Kwon was handed over to U.S. authorities, including the FBI, on Monday, nearly 21 months after his arrest in Montenegro for possession of a fake passport. The Southern District of New York, known for prosecuting large-scale financial crimes and often referred to as the "Wall Street Grim Reaper," is leading the case. This is the same office that handled the case against Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX.

The charges against Kwon include securities fraud, wire fraud, commodities fraud, and conspiracy to defraud and engage in market manipulation. The allegations span multiple time periods, with commodities, securities, and wire fraud charges divided into two intervals: 2019–2022 and 2021–2022, respectively.

The potential sentence for Kwon contrasts with South Korea's sentencing guidelines for economic crimes, which cap at approximately 40 years. The U.S. system employs concurrent and consecutive sentencing, adding individual penalties for each charge. According to Bloomberg, commodity fraud charges carry up to 10 years in prison, securities and wire fraud up to 20 years each, and conspiracy to commit fraud and market manipulation up to five years each. Despite the severe potential penalties, actual sentences often differ. For example, Sam Bankman-Fried faced a theoretical maximum sentence of 115 years after being convicted on seven counts in his first trial but ultimately received a sentence of 25 years in March 2024.


김윤진 기자 kyj@donga.com