Crypto mogul Do Kwon to be sentenced for misleading investors who lost billions in stablecoin crash
NEW YORK (AP) — Cryptocurrency mogul Do Kwon is scheduled to be sentenced Thursday for allegedly misleading investors who lost billions of dollars when his company disrupted the crypto ecosystem. crashed in 2022.
Kwon, known by some as the “cryptocurrency king” pleaded guilty The lawsuit was filed in Manhattan federal court in August, charging fraud stemming from Terraform Labs’ $40 billion crash.
The company had touted TerraUSD as a reliable “stablecoin” (a type of currency that is usually pegged to stable assets to prevent drastic fluctuations in prices). But prosecutors say it was all an illusion that crashed, devastated investors and triggered “a series of crises that wreaked havoc on cryptocurrency markets.”
Kwon, who hails from South Korea, agreed to pay more than $19 million in fines as part of the plea agreement.
While federal sentencing guidelines recommend a sentence of about 25 years in prison, prosecutors asked the court to sentence Kwon to 12 years in prison. They noted that he had confessed to the crime, was facing further investigation in Korea, and had already served time in Montenegro while awaiting extradition.
“Kwon’s fraud was massive and permeated nearly every aspect of Terraform’s alleged business,” prosecutors wrote in a recent memo to the judge. “His rampant lies left a trail of financial ruin.”
In their own letter, Kwon’s lawyers asked that the sentence not exceed five years, arguing that his behavior was motivated by arrogance and desperation, not greed.
“I alone am responsible for everyone’s pain. The community looked to me to know the way, and I led them astray out of arrogance,” Kwon wrote in a letter to the judge, adding: “I made false statements out of arrogance that are now a source of deep regret.”
Officials said investors around the world lost money due to the collapse of the Singapore crypto company Kwon co-founded in 2018. Nearly $40 billion in market capitalization was wiped out for holders of TerraUSD and its floating sister currency, Luna, after the stablecoin fell well below its $1 peg.
Kwon was returned From Montenegro to the United States following his arrest while traveling with a fake passport in Europe on March 23, 2023.
