A court issued a ruling yesterday, Thursday, sentencing Do Kwon, the South Korean entrepreneur in the cryptocurrency sector, to 15 years in prison for his responsibility in two digital operations that lost an estimated $40 billion in 2022, which the judge described as "legendary fraud."
Kwon (34 years old) - who co-founded Terraform Labs based in Singapore and developed the "Terra USD" and "Luna" tokens, had previously pleaded guilty and admitted to misleading investors about a currency that was supposed to maintain a stable price during periods of cryptocurrency market volatility.
Kwon is one of the cryptocurrency moguls facing federal charges after the decline in digital currency prices in 2022 led to the collapse of several companies.
Kwon addressed the court while wearing a yellow prison uniform, and apologized to his victims, including hundreds who sent letters to the court describing the harm they suffered.
Kwon said, "All their stories were horrific, and it reminded me once again of the huge losses I caused. I want to say to those people that I am sorry."
Kwon was accused of misleading investors in 2021 about the "Terra USD" currency, which is referred to as a stablecoin designed to maintain a value of one dollar.
Prosecutors said that when the value of "Terra USD" fell below its dollar peg in May 2021, Kwon told investors that a computer algorithm known as the "Terra Protocol" restored the currency's value.
According to the indictment documents, Kwon arranged with a high-frequency trading firm to secretly purchase millions of dollars worth of cryptocurrency to artificially support its price.
Kwon pleaded guilty last August to two counts of conspiracy to commit fraud and wire fraud, and apologized in court for his behavior.
Kwon agreed in 2024 to pay $80 million as a civil penalty and was banned from trading in cryptocurrencies as part of a $4.55 billion settlement reached with him and Terraform with the U.S. Securities and Exchange Commission.
Kwon also faces charges in South Korea, and as part of the plea deal, prosecutors will not oppose Kwon's request to be transferred abroad after serving half of his sentence in the United States.
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