TerraUSD creator Do Kwon sentenced to 15 years over $40 billion crypto collapse

Do Kwon, the South Korean cryptocurrency entrepreneur down 2 integer currencies that mislaid an estimated $40 cardinal successful 2022, was sentenced connected Thursday to 15 years successful situation for what a justice called an "epic fraud."

U.S. District Judge Paul A. Engelmayer, who handed down the sentence, sharply rebuked Kwon for repeatedly lying to mundane investors who trusted him with their beingness savings.

"This was a fraud connected an epic, generational scale. In the past of national prosecutions, determination are fewer frauds that person caused arsenic overmuch harm arsenic you have, Mr. Kwon," Engelmayer said during a proceeding successful Manhattan national court.

Kwon, 34, who co-founded Singapore-based Terraform Labs and developed the TerraUSD and Luna currencies, antecedently pleaded blameworthy and admitted to misleading investors astir a coin that was expected to support a dependable terms during periods of crypto marketplace volatility.

He is 1 of respective cryptocurrency moguls to look national charges aft a slump successful integer token prices successful 2022 prompted the illness of a fig of companies.

Dressed successful yellowish situation garb, Kwon addressed the tribunal and apologized to his victims, including the hundreds who submitted letters to the tribunal describing the harm they had suffered.

"All of their stories were harrowing and reminded maine again of the large losses that I've caused. I privation to archer these victims that I americium sorry," Kwon said.

Ayyildiz Attila, 1 of the hundreds of victims who submitted letters to the court, said helium mislaid betwixt $400,000 and $500,000 successful the collapse.

"My savings, my future, and the results of years of sacrifice disappeared. I struggled to support up with payments and responsibilities, and everything I had worked forwas erased," Attila said.

Kwon's lawyer Sean Hecker said successful an email aft the sentencing that Kwon spoke from the heart, expressed genuine remorse and volition proceed his efforts to marque amends.

U.S. Attorney Jay Clayton successful Manhattan said successful a connection pursuing the proceeding that Kwon devised elaborate schemes to inflate the worth of his cryptocurrencies and fled accountability erstwhile his crimes caught up to him.

Prosecutors had asked for a condemnation of astatine slightest 12 years successful prison, saying the clang of Kwon's Terra cryptocurrency caused billions of dollars successful losses and triggered a cascade of crises successful the crypto market.

Kwon's lawyers had asked that helium beryllium sentenced to nary much than 5 years truthful helium tin instrumentality to South Korea to look transgression charges.

Prosecutors charged Kwon successful January with 9 transgression counts for securities fraud, ligament fraud, commodities fraud and wealth laundering conspiracy.

Kwon was accused of misleading investors successful 2021 about TerraUSD, a alleged stablecoin designed to support a worth of $1. Prosecutors alleged that when TerraUSD slipped beneath its $1 peg successful May 2021, Kwon told investors a machine algorithm known arsenic "Terra Protocol" had restored the coin's value.

Instead, Kwon arranged for a high-frequency trading steadfast to secretly bargain millions of dollars of the token to artificially prop up its price, according to charging documents.

Kwon pleaded blameworthy successful August to 2 counts, conspiracy to defraud and ligament fraud, and apologized successful tribunal for his conduct.

"I made mendacious and misleading statements astir wherefore it regained its peg by failing to disclose a trading firm's relation successful restoring that peg," Kwon said astatine the time. "What I did was wrong."

Kwon agreed successful 2024 to wage $80 cardinal arsenic a civilian good and beryllium banned from crypto transactions arsenic portion of a $4.55 cardinal colony helium and Terraform reached with the U.S. Securities and Exchange Commission.

He besides faces charges successful South Korea. As portion of his plea deal, prosecutors volition not reason Kwon's imaginable exertion to beryllium transferred overseas aft serving fractional his U.S. sentence.