Cryptocurrency tycoon Do Kwon was sentenced Thursday to 15 years in prison by a U.S. court for fraud linked to the collapse of his company, Terraform Labs, which erased $40 billion in investor funds and sent shockwaves through global crypto markets.
Kwon, 34, who created the digital currencies TerraUSD and Luna, pleaded guilty in August in New York after months on the run across Asia and Europe. He still faces additional fraud charges in South Korea, his home country.
Terraform Labs’ TerraUSD was marketed as a “stablecoin,” pegged to the U.S. dollar to prevent drastic price swings, while Luna served as its sister token. Kwon successfully promoted the cryptocurrencies as the next big thing, attracting billions of dollars in investments and worldwide attention. Praised in South Korean media as a “genius,” he appeared in Forbes’ 2019 Asia 30 under 30 list.
Despite this hype, TerraUSD and Luna collapsed in May 2022, with experts likening the scheme to a pyramid structure in which many investors lost their life savings. Kwon fled South Korea ahead of the crash and was arrested in March 2023 at Podgorica airport in Montenegro while attempting to board a flight to Dubai, carrying a fake Costa Rican passport. He was extradited to the United States last year.
Following his sentencing, U.S. prosecutors detailed how Kwon made false claims about his business to lure investors, including American firms. At its peak in spring 2022, the combined market value of TerraUSD and Luna exceeded $50 billion. “Do Kwon devised elaborate schemes to mislead investors and inflate the value of Terraform's cryptocurrencies for his own benefit,” U.S. Attorney Jay Clayton said.
Prosecutors said Kwon sought “political protection” from several countries after the collapse and cited a recorded conversation in which he instructed an associate to “tell them to fuck off” when dealing with authorities investigating the case. Alongside the prison term, Kwon was ordered to forfeit more than $19 million in proceeds from his illegal activities.
The U.S. Justice Department noted in court filings that Kwon could be allowed to serve part of his sentence in South Korea, provided at least half is completed in the United States.
The case highlights growing regulatory scrutiny of cryptocurrencies following a series of high-profile collapses and controversies. Kwon’s meteoric rise and dramatic fall has drawn comparisons to Elizabeth Holmes, the disgraced founder of the Theranos medical startup.
Source: AFP
Bd-pratidin English/ Jisan
