South Korean cryptocurrency magnate sentenced to 15 years in prison for fraud
The South Korean cryptocurrency magnate Do Kwon, accused of causing a fraudulent collapse of more than US$ 40 billion (217 billion reais) in 2022, was sentenced on Thursday (11) to 15 years in prison in New York, according to France Presse.
Kwon, who promoted two digital currencies that ended up crashing, pleaded guilty in August to conspiracy to commit fraud and wire fraud, in a case that shook the global cryptocurrency market.
Through his company, Terraform Labs, Kwon, 34, created the cryptocurrency TerraUSD, presented as a stablecoin, a type of digital currency whose price would be linked to a traditional currency — in this case, the dollar.
Kwon presented the assets as the great innovation of this digital market and attracted billions in investments. He received praise from South Korean outlets, portraying him as a genius, while thousands rushed to invest in his company.
In 2019, Kwon made it to Forbes magazine's “30 Under 30 Asia” list. But, despite the high investments, TerraUSD and its sister coin, Luna, entered a spiral of collapse in May 2022.
According to experts, Kwon structured a disguised pyramid scheme, where many investors lost life savings accumulated over a lifetime.
Unlike other currencies of this kind, such as Tether and USDC, Terra was not linked to safe assets, such as cash or government bonds, which could be redeemed in case of instability.
Kwon left South Korea before the collapse and spent months on the run. In March 2023, he was arrested at the airport in Podgorica, the capital of Montenegro, while preparing to board a flight to Dubai using a fake Costa Rican passport.
Source: G1
