In brief
Do Kwon, a former South Korean crypto entrepreneur, has been sentenced to 15 years in prison for his role in a fraud scheme that contributed to the failure of TerraUSD and Luna, amounting to a staggering $40 billion loss. The court characterized Kwon's actions as an epic fraud, marking one of the worst in the history of federal prosecutions. Kwon admitted to misleading investors about the stability of TerraUSD, which was intended to be a stablecoin pegged to the US dollar.
A former crypto entrepreneur who was behind two digital currencies that collapsed and lost an estimated $40bn has been sentenced by a New York judge to 15 years in prison for an epic fraud.
Do Kwon, a South Korean national, was co-founder of Singapore-based Terraform Labs, which developed the TerraUSD and Luna digital coins.
Kwon had admitted misleading investors about TerraUSD, a so-called stablecoin that was supposed to maintain its value against the US dollar.
He was one of several crypto executives facing charges in the US after a slump in digital tokens in 2022 triggered the failure of numerous companies.
US District Judge Paul A Engelmayer, who handed down the sentence, stated that the Stanford graduate had repeatedly lied to investors who placed their trust in him.
This was a fraud on an epic, generational scale, he remarked during the court hearing in Manhattan.
In the history of federal prosecutions, there are few frauds that have caused as much harm as you have.
Kwon pleaded guilty in August to conspiracy to defraud and wire fraud and expressed remorse to the judge.
I have spent almost every waking moment of the last few years thinking of what I could have done different and what I can do now to make things right, he stated.
Prosecutors alleged that when TerraUSD fell below its $1 peg in May 2021, Kwon falsely informed investors that a computer algorithm had restored its value.
In contrast, Kwon had allegedly arranged for a trading firm to covertly purchase millions of dollars of the coin to create an illusion of its stability.
