Crypto Mogul Do Kwon Gets 15-Year Prison Sentence for Lying About Experimental Coins That Crashed the Crypto Market
A US federal judge handed down a 15-year prison sentence to Do Kwon, the founder of Terraform Labs, on Thursday for lying about experimental coins that led to a $40 billion collapse in the crypto economy. The sentence marks the culmination of a saga that began in May 2022 when Terra's stablecoin UST lost its dollar peg and sent shockwaves through the market.
Kwon was found guilty of defrauding investors who purchased UST, which he claimed was a stable coin that could automatically return to its $1 price point. In reality, Kwon had secretly struck deals with trading firms to artificially drive up the value of UST in order to prop up the Terra ecosystem.
The collapse of UST led to the bankruptcy of numerous other companies and even caused the collapse of hedge fund Three Arrows Capital, crypto lender Voyager Digital, BlockFi, and Genesis. It also contributed to the downfall of FTX, a popular cryptocurrency exchange that was forced to use customer funds to pay back lenders.
Kwon fled Singapore for the Balkans after the collapse but was arrested by authorities in Montenegro in March 2023 on charges brought by the US Securities and Exchange Commission. He later pleaded guilty to defrauding investors about Terraform's coins and agreed to a plea deal with the Department of Justice.
During his sentencing hearing, Kwon expressed remorse for his actions but also attempted to minimize his culpability. However, Judge Paul Engelmayer ruled that Kwon's lies had left a "trail of financial destruction in their wake" and that he needed to be held accountable for his crimes.
The sentence marks a major victory for regulators who have been trying to crack down on the crypto industry's lack of oversight and reckless behavior. It also serves as a warning to other would-be cryptocurrency moguls that they will face serious consequences if they engage in similar conduct.
Kwon is currently being held in a temporary facility until he can be transferred to a long-term prison location. He has requested permission to be transferred to South Korea after serving half of his sentence, but it's unclear whether this will be granted. If so, Kwon may face additional charges and potentially even longer prison time when he returns home.
As one investor who lost $190,000 in the Terra collapse noted during the sentencing hearing, "I could not imagine that a person I'd never met could destroy my life so completely." The case serves as a reminder of the devastating consequences of cryptocurrency scams and the importance of strong regulation to protect investors.
A US federal judge handed down a 15-year prison sentence to Do Kwon, the founder of Terraform Labs, on Thursday for lying about experimental coins that led to a $40 billion collapse in the crypto economy. The sentence marks the culmination of a saga that began in May 2022 when Terra's stablecoin UST lost its dollar peg and sent shockwaves through the market.
Kwon was found guilty of defrauding investors who purchased UST, which he claimed was a stable coin that could automatically return to its $1 price point. In reality, Kwon had secretly struck deals with trading firms to artificially drive up the value of UST in order to prop up the Terra ecosystem.
The collapse of UST led to the bankruptcy of numerous other companies and even caused the collapse of hedge fund Three Arrows Capital, crypto lender Voyager Digital, BlockFi, and Genesis. It also contributed to the downfall of FTX, a popular cryptocurrency exchange that was forced to use customer funds to pay back lenders.
Kwon fled Singapore for the Balkans after the collapse but was arrested by authorities in Montenegro in March 2023 on charges brought by the US Securities and Exchange Commission. He later pleaded guilty to defrauding investors about Terraform's coins and agreed to a plea deal with the Department of Justice.
During his sentencing hearing, Kwon expressed remorse for his actions but also attempted to minimize his culpability. However, Judge Paul Engelmayer ruled that Kwon's lies had left a "trail of financial destruction in their wake" and that he needed to be held accountable for his crimes.
The sentence marks a major victory for regulators who have been trying to crack down on the crypto industry's lack of oversight and reckless behavior. It also serves as a warning to other would-be cryptocurrency moguls that they will face serious consequences if they engage in similar conduct.
Kwon is currently being held in a temporary facility until he can be transferred to a long-term prison location. He has requested permission to be transferred to South Korea after serving half of his sentence, but it's unclear whether this will be granted. If so, Kwon may face additional charges and potentially even longer prison time when he returns home.
As one investor who lost $190,000 in the Terra collapse noted during the sentencing hearing, "I could not imagine that a person I'd never met could destroy my life so completely." The case serves as a reminder of the devastating consequences of cryptocurrency scams and the importance of strong regulation to protect investors.
, like what's wrong with putting pineapple on a perfectly good pie? some ppl say it ruins the flavor or whatever, but idc, gotta try it for myself one day. and omg did you know that pineapple is basically a superfood now? apparently it's got some crazy health benefits too 
, might have to start putting it on my pizza crust...
crypto's all about risk, folks! you gotta know when to hold 'em, know when to fold 'em... or in Kwon's case, when to get caught and face the music 
. seriously though, this guy thought he could just lie his way out of trouble? that's like trying to pass off a dodgy gadget as a brand new iPhone 
. kudos to the regulators for finally taking action! now if you'll excuse me, I'm gonna go bury my virtual bitcoin under a fake rock and pretend it never existed 
15 years is a decent sentence, but I mean, $40 billion worth of damage? that's like taking down a whole city block 
at least it's good that someone held him accountable, now if only regulators had done this sooner... would've saved all those people from getting crushed 
gotta wonder what other scammers are out there just waiting to strike 
this sentence is crazy 15 years is like forever lol he basically got caught red handed and now he's gonna have to live with that for like half his life 
i remember when bitcoin was still in its early days and people were talking about how it could change the world. fast forward to now and we've got crypto moguls doing this kinda stuff and thinking they can just escape justice 
was it just terraform labs or was there more going on behind the scenes?
Kwon should've gotten like 5 or 6 at most 
I mean, yeah he was trying to scam people left and right but come on 15? It's just a sentence that's gonna make the crypto industry even more shady than it already is 
Fingers crossed they don't try to appeal or anything
. like, dude, you got caught red-handed (or should i say, red-walleted?) and now u gotta pay the price for ur greed 
. btw, who else lost $190k in the terra collapse? me too 
anyway im glad somebodys holdin him accountable 
but its crazy how this whole saga started 2 years ago and now theres still people tryna get justice 
lets hope kwon gets transferred to south korea soon so he can face more charges 
Like, $190k loss for one investor?! That's not just financial ruin, that's life-altering trauma 
. Anyways, glad to see some justice served... but I'm still shaking my head over this whole thing 
" 
15 years is still a pretty lenient sentence if you ask me... I mean, the dude basically destroyed a $40 billion market with his lies about experimental coins. It's like, yeah sure Kwon was remorseful but come on, he had to know what was going on. The whole Terra collapse was a mess and it's crazy that some people lost their entire life savings. 
. And yeah, the sentence marks a major victory for regulators, but it's about time justice was served 
. Kwon should've thought twice before trying to pull that fast one on investors 
15-year prison sentence is pretty harsh for this guy, but honestly, he got what was coming to him 