A former crypto entrepreneur who was behind two digital currencies that collapsed and lost an estimated $40bn ($29.9bn) has been sentenced by a New York judge to 15 years in prison for an “epic” fraud.
Do Kwon, a South Korean national, was co-founder of Singapore-based Terraform Labs, which developed the TerraUSD and Luna digital coins.
Kwon had admitted misleading investors about TerraUSD, a so-called stablecoin that was supposed to maintain its value against the US dollar.
He was one of a number of crypto bosses to face charges in the US after digital tokens slumped in 2022, triggering the failure of several companies.
US District Judge Paul A Engelmayer, who handed down the sentence, said the Stanford graduate had repeatedly lied to investors who trusted him with their money.
“This was a fraud on an epic, generational scale,” he said during Thursday’s court hearing in Manhattan.
“In the history of federal prosecutions, there are few frauds 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 have spent almost every waking moment of the last few years thinking of what I could have done different and what I can do now to make things right,” he said.
Prosecutors alleged that when TerraUSD fell below its $1 peg in May 2021, Kwon told investors that a computer algorithm had restored its value.
Instead, Kwon had arranged for a trading firm to secretly buy millions of dollars of the coin to artificially boost its value, according to court documents.
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