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Do Kwon, a former cryptocurrency entrepreneur behind two digital coins that collapsed, wiping out an estimated $40bn (£29.9bn), 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 the Singapore-based Terraform Labs, the firm that created the TerraUSD and Luna tokens.
He admitted to misleading investors about TerraUSD, a so-called stablecoin intended to hold its value against the US dollar.
He became one of several crypto executives charged in the United States after digital assets plunged in 2022, leading to the downfall of multiple companies.
US District Judge Paul A. Engelmayer, who issued the sentence, said the Stanford-educated founder repeatedly deceived investors who had placed their confidence – and money – in him.
“This was fraud on an epic, generational scale,” the judge said during Thursday’s hearing in Manhattan. “In the history of federal prosecutions, few frauds have caused as much harm as yours.”
Kwon, who pleaded guilty in August to conspiracy to defraud and to wire fraud, expressed regret before the court.
“I have spent almost every waking moment of the past few years thinking about what I could have done differently, and what I can do now to make amends,” he said.
Prosecutors said that when TerraUSD fell below its $1 peg in May 2021, Kwon told investors a computer algorithm had restored its value.
In reality, he had secretly arranged for a trading firm to purchase millions of dollars’ worth of the coin to artificially prop up its price, according to court filings.
