"Kwon cut a solemn figure as he entered the courtroom, his head bowed. He wore a bright lemon-colored prison jumpsuit over a long-sleeve shirt, with cuffs around his waist and hands. In August, Kwon pleaded guilty to defrauding investors who purchased crypto coins issued by his company, Terraform Labs. In May 2022, the abrupt collapse of those coins wiped out $40 billion and sent the crypto economy into a tailspin that bankrupted numerous other companies."
"Kwon started Terraform in 2018, alongside cofounder Daniel Shin. Two years later, the company announced plans to launch TerraUSD (UST), a stablecoin whose value was supposedly pegged to the US dollar by way of an algorithm. The algorithm would effectively tie UST to a second coin issued by the firm, LUNA. A dollar's worth of LUNA could be exchanged for a dollar's worth of UST, and vice versa."
"Kwon's fraud was colossal in scope, permeating virtually every facet of Terraform's purported business," US prosecutors wrote in a recent court filing. "His rampant lies left a trail of financial destruction in their wake." The offenses to which Kwon pleaded guilty carry a maximum sentence of 25 years in prison. Before the hearing, prosecutors had petitioned for a twelve-year prison term."
Do Kwon was sentenced to 15 years in prison by a US federal judge in the Southern District of New York after pleading guilty to defrauding investors in Terraform Labs. The May 2022 collapse of Terraform-issued coins erased roughly $40 billion and triggered widespread bankruptcies across the crypto sector. Terraform was founded in 2018 with cofounder Daniel Shin and launched TerraUSD (UST), a stablecoin algorithmically linked to the LUNA token. The algorithm failed when UST lost its dollar peg, prompting a panicked sell-off. Prosecutors described Kwon's fraud as pervasive and financially destructive; charges carry up to 25 years.
Read at WIRED
Unable to calculate read time
Collection
[
|
...
]