South Korean cryptocurrency entrepreneur Do Kwon has received a 15-year prison sentence, as part of a verdict handed down by a U.S. judge.
Kwon was the founder of Terraform Labs, the cryptocurrency firm operating two tokens: the TerraUSD stablecoin and the Luna stablecoin.
Terraform was created in 2018, and its products managed to capture the growth in the crypto bull market of 2021, but suffered the bear market that followed immediately after, exposing huge operational and transparency issues. The estimated value lost in the crash was $40 billion.
The TerraUSD stablecoin claimed to be an algorithmic stablecoin tied on a 1:1 basis to the dollar, even when it wasn’t. The stablecoin failed to hold value, especially in 2021.
Do Kwon’s sentence represents a close to the 2022 period that saw mass-scale scams, frauds, and sophisticated-level crime conducted with worldwide operations; other entrepreneurs convicted and jailed as part of that fallout included Alex Mashinsky and Sam Bankman-Fried.
U.S. prosecutors and attorneys representing Do Kwon were locked in a legal battle, with both sides trying to push for their recommended prison sentence.
Do Kwon’s lawyers were seeking a sentence of 5 years, while the prosecuting team representing the federal government was seeking a sentence of 12 years. Kwon’s current prison sentence of 15 years was handed down by U.S. judge Paul Engelmeyer, who has been presiding over the case since it began.
According to the BBC, He has said that the U.S. has seen few frauds conducted on the same level as Terraform Labs, calling it a “fraud on an epic generational scale.”