Algiers – South Korean cryptocurrency entrepreneur Do Kwon has been sentenced to 15 years in prison for his role in a massive crypto fraud scheme that defrauded investors of an estimated $40 billion in 2022. The court described Kwon’s actions as an “epic fraud.”
Kwon, 34, co-founded Singapore-based Terraform Labs and developed the TerraUSD and Luna cryptocurrencies. He pleaded guilty to misleading investors about TerraUSD, a stablecoin designed to maintain a consistent value despite market volatility.
Kwon is among several crypto figures facing federal charges following the 2022 crypto market crash that led to the collapse of numerous companies. Addressing the court in a yellow prison uniform, Kwon apologized to his victims, many of whom submitted letters detailing their losses. “All of their stories were devastating, and reminded me once again of the great losses I caused,” Kwon stated. “I want to say to them that I am sorry.”
Prosecutors argued that Kwon misled investors in 2021 about TerraUSD, claiming it was a stablecoin designed to maintain a value of one U.S. dollar. When TerraUSD’s value fell below its dollar peg in May 2021, Kwon allegedly told investors that a computer algorithm known as the “Terra protocol” had restored the currency’s value. However, according to charging documents, Kwon secretly arranged for a high-frequency trading firm to purchase millions of dollars of the cryptocurrency to artificially support its price.
Kwon pleaded guilty last August to two counts of conspiracy to commit fraud and wire fraud, and apologized in court for his behavior. In 2024, Kwon agreed to pay an $80 million civil penalty and was barred from trading cryptocurrencies as part of a $4.55 billion settlement reached with the U.S. Securities and Exchange Commission.
Kwon also faces charges in South Korea.
