- Do Kwon, co-founder of TerraUSD has received a 15-year prison sentence after being convicted.
- During the sentence, the judge condemned the case as an unusually large and harmful fraud.
- The verdict prompted celebration across the crypto community as affected investors got relief.
TerraUSD co-founder Do Kwon was sentenced to 15 years in jail on Thursday 11 December after being convicted of misleading investors into losing $40 billion. The news has sparked responses from the crypto community as many of his victims rejoice.
After a long and winding trial over the last three years, Kwon was finally sentenced to jail by U.S. District Judge Paul A. Engelmayer, who passed the sentence and was personally outraged at the South Korean crypto mogul’s attitude towards investors.
Judge Says Kwon Committed an “Epic” Fraud
Do Kwon co-founded Terraform Labs, the company behind TerrUSD stablecoin and the Luna currencies. Known as an algorithmic stablecoin, its stability was tied to Luna Classic through an algorithmic setup. The stablecoin algorithm however lost control, causing the stablecoin to crash almost 100%.
This crash led to several investors losing significant portions of their net worth or their entire life savings, making it one of the biggest frauds in history. Prior to his sentencing, prosecutors had asked for a sentence of at least 12 years in prison, arguing that the crash of his Terra cryptocurrency caused billions of dollars in losses and ruined many lives.
While passing the sentence, Judge Engelmayer said:
“This was a fraud on an epic, generational scale. In the history of federal prosecutions, there are few frauds that have caused as much harm as you have, Mr. Kwon.”
A 34-year old South Korean, Kwon is one of the youngest billionaire crypto founders. He had pleaded guilty to misleading investors about TerrauSD which failed to maintain its price as it should during market volatility, leading to billions in losses. The convicted Kwon apologized to the court and to his victims after the sentence, but still faces charges in his home country in South Korea.
Investors Rejoice on Kwon’s Sentence
Kwon’s 15-year prison sentence has sparked celebration in the online crypto community, with many of his victims expressing satisfaction while others say the sentence wasn’t severe enough.
The story brings to mind the FTX collapse, another major fraud of the century that caused such immense pain it is now used to describe the worst market scenarios today.
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