First Sam Bankman-Fried was sentenced to jail for his crypto crime. Now, it’s the flip of Do Kwon, who’s broadly thought to be crypto’s most notorious fraudster after Bankman-Fried. On Thursday, the 34 year-old was sentenced to fifteen years in jail, after being charged with deceptive traders and inflating the worth of his firm’s cryptocurrencies often known as Terra and Luna.
At his sentencing listening to in New York, the choose chastised Kwon, suggesting he had succumbed to the worst parts of an trade identified for get-rich-quick swindles. “You will have been bitten by the crypto bug and I don’t suppose that’s modified. You have to be incapacitated. If not to your responsible plea, my sentence would have been greater,” mentioned U.S. District Choose Paul Engelmayer, in keeping with a tweet from Internal Metropolis Press, which offers dependable reporting on court docket proceedings.
The sentencing is the ultimate fallout from 2022, when Kwon’s stablecoins TerraUSD and Luna each all of the sudden collapsed in worth, which led to large losses for traders. Kwon was charged with committing wire fraud and conspiring to commit securities fraud and commodities fraud, in keeping with a assertion by the Division of Justice.
After his firm went bankrupt in 2022, Kwon was on the run for months. He fled South Korea and later Singapore after he was wished by each the US and South Korea. He was arrested in March 2023 in Montenegro after he was present in possession of a pretend Costa Rican passport. Late final yr, Montenegro extradited Kwon to the US.
In a 2024 swimsuit by the Securities and Trade Fee, the regulator discovered Terraform and Kwon accountable for civil fraud. A jury then decided that Kwon and Terraform misled traders. Kwon and Terraform lied about how the corporate’s blockchain expertise was utilizing Chai, a Korean fee utility, to make transactions. Kwon and Terraform had additionally claimed that the stablecoin was algorithmically pegged to the US greenback, which jurors discovered to be deceptive to traders.
Kwon agreed to pay greater than $200 million and Terraform agreed to pay greater than $3.5 billion in an effort to wind down the agency.
In August, Kwon pleaded responsible to conspiracy and wire fraud. “I knowingly agreed with others to defraud, and did the truth is defraud, purchasers of cryptocurrencies issued by my firm, Terraform Labs,” Kwon mentioned on the time. “What I did was improper and I need to apologize for my conduct. I take full duty.”
Kwon is one in every of a number of excessive profile crypto figures sentenced to jail within the final couple of years. Sam Bankman-Fried, the founding father of FTX, was sentenced to 25 years in jail in March of final yr. A month later, Changpeng Zhao, co-founder Binance, was sentenced to 4 months in jail. President Donald Trump has since pardoned Zhao, whereas Bankman-Fried stays behind bars.
