A former cryptocurrency entrepreneur, responsible for two digital currencies that experienced a catastrophic collapse, resulting in an estimated $40 billion (£29.9 billion) loss, has received a 15-year prison sentence from a New York judge for what was described as an “epic” fraud.
Do Kwon, a South Korean national, co-founded Terraform Labs, a Singapore-based company known for developing the digital coins TerraUSD and Luna.
Kwon previously acknowledged misleading investors regarding TerraUSD, a stablecoin designed to maintain parity with the US dollar.
His case is among several involving prominent crypto figures facing charges in the US, following the 2022 digital token market downturn that led to numerous company failures.
US District Judge Paul A Engelmayer, who delivered the sentence, stated that the Stanford graduate had repeatedly deceived investors who had entrusted him with their funds.
During the court hearing in Manhattan on Thursday, Judge Engelmayer remarked, “This was a fraud on an epic, generational scale.”
He added, “In the history of federal prosecutions, few frauds have inflicted as much harm.”
Kwon, who pleaded guilty in August to conspiracy to defraud and wire fraud, conveyed his remorse to the judge.
He stated, “I have spent almost every waking moment of the last few years thinking of what I could have done differently and what I can do now to make things right.”
Prosecutors claimed that in May 2021, when TerraUSD dropped below its $1 peg, Kwon informed investors that its value had been restored by a computer algorithm.
However, court documents indicate that Kwon had secretly arranged for a trading firm to purchase millions of dollars worth of the coin to artificially inflate its value.
