A former crypto entrepreneur behind two digital currencies that collapsed and lost an estimated $40bn (£29.9bn) has been sentenced to 15 years in prison by a New York judge for an “epic” fraud.
Do Kwon, a South Korean citizen, was the co-founder of Singapore-based Terraform Labs, which developed the TerraUSD and Luna digital coins.
Kwon admitted that he misled investors about TerraUSD, a so-called stablecoin that was supposed to maintain its value against the U.S. dollar.
He was one of many crypto bosses to face charges in the US after digital tokens plunged in 2022, triggering the bankruptcy of several companies.
U.S. District Judge Paul Engelmayer, who handed down the sentence, said the Stanford graduate repeatedly lied to investors who trusted him with their money.
“This was a fraud of epic proportions, spanning generations,” he said during a court hearing Thursday in Manhattan.
“There are few cases of fraud in the history of federal prosecutions that have caused as much harm as you have.”
Kwon, who pleaded guilty in August to conspiracy to defraud and wire fraud, expressed remorse to the judge.
“I've spent almost every waking minute of the last few years thinking about what I could have done differently and what I can do now to make things right,” he said.
Prosecutors argued that when TerraUSD fell below its $1 peg in May 2021, Kwon told investors that a computer algorithm had restored its value.
Instead, according to court documents, Kwon set up a trading firm that secretly bought millions of dollars worth of the coin to artificially increase its value.
