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A New York court has sentenced former cryptocurrency entrepreneur Do Kwon to 15 years in prison for orchestrating what a judge described as an “epic, generational” fraud that wiped out an estimated $40 billion in investor assets.
Kwon, a South Korean national and co-founder of Singapore-based Terraform Labs, was behind the collapsed digital currencies TerraUSD and Luna.
He pleaded guilty in August to conspiracy to defraud and wire fraud after admitting to misleading investors about the stability and performance of TerraUSD.
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US District Judge Paul A. Engelmayer, delivering the sentence on Thursday in Manhattan, said Kwon repeatedly lied to investors who trusted him with their funds.
“In the history of federal prosecutions, there are few frauds that have caused as much harm as you have,” Judge Engelmayer said.
Kwon expressed remorse before the court, stating he had spent “almost every waking moment” reflecting on what he could have done differently.
TerraUSD, marketed as a “stablecoin” pegged to the US dollar, collapsed in May 2021. Prosecutors said that when its value slipped, Kwon falsely claimed that an algorithm had restored its peg. In reality, he had directed a trading firm to secretly purchase millions of dollars’ worth of the coin to artificially prop up its price.
Kwon’s downfall came as part of a wider reckoning in the crypto industry, with several high-profile executives facing charges following the 2022 market crash that triggered multiple company failures.
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