Executive Summary
- District Judge Paul Engelmeyer reprimanded prosecutors for submitting 315 victim impact statements just 24 hours before the hearing.
- Do Kwon’s legal team declined an offer to delay sentencing by up to six weeks, citing travel logistics for attendees.
- Victims testified regarding significant financial losses, homelessness, and family breakdowns resulting from the Terra/LUNA collapse.
- The defense waived the right to appeal the sentence based on the late disclosure of the victim statements.
The sentencing hearing for Terraform Labs co-founder Do Kwon proceeded in the Southern District of New York on Thursday, following a procedural dispute regarding the prosecution’s submission of hundreds of victim impact statements just hours before the court convened. District Judge Paul Engelmeyer offered the defense the option to postpone the sentencing by up to six weeks to review the new materials, but Kwon’s legal team declined, opting to move forward with the proceedings.
According to court reports, Judge Engelmeyer expressed visible frustration with the prosecution for providing 315 victim letters to the court and defense counsel only 24 hours prior to the hearing. The judge characterized the late disclosure as a significant procedural error. Addressing the government attorneys, Engelmeyer stated, “I am obliged to say the obvious — you need to do better.” He further noted that failing to give earlier notice was “disrespectful to the defense” and “not fully respectful to the victims” who sought to have their voices heard.
Despite the judge’s offer to reschedule, Kwon and his attorneys chose to continue, citing the logistical burden on attendees who had traveled internationally to be present. By proceeding, the defense waived their right to appeal the sentence based on the late disclosure of these specific documents.
During the hearing, the court heard testimony from several victims detailing the financial devastation caused by the 2022 collapse of the Terra/LUNA ecosystem. Chauncey St. John, testifying in person, described how the implosion destroyed his charitable organization, Angel Protocol, and wiped out the life savings of his in-laws. St. John told the court, “I have to live with the guilt of their losses every day,” while adding that he personally forgave Kwon.
Other testimonies provided via telephone described severe personal consequences. Stanislav Trofinchuk, a Ukrainian national, stated that the financial losses led to the dissolution of his marriage and forced his children to abandon their education. Another victim, an unnamed 58-year-old Russian woman, testified through a translator that she is now homeless in Tbilisi, Georgia, after her $81,000 investment was reduced to approximately $13.
Judicial Procedural Standards
This hearing underscores the critical importance of procedural adherence in high-profile financial fraud cases within the federal court system. Judge Engelmeyer’s admonishment of the prosecution highlights the judiciary’s responsibility to strictly balance victim participation with the defendant’s due process rights, ensuring that late evidentiary submissions do not compromise the integrity of the sentencing phase. As the court weighs the extensive volume of impact statements against federal sentencing guidelines, the proceedings illustrate the weight courts place on tangible human impact in white-collar crime adjudications. It is important to note that all individuals are presumed innocent until proven guilty in a court of law.
