Court Verdict
A New York court has sentenced former cryptocurrency entrepreneur Do Kwon to 15 years in prison after finding him guilty of orchestrating what was described as a “grand fraud.” According to BBC Urdu, the case was heard by US District Judge Paul A. Engelmayer, who said the scale of deception was among the largest in federal history.
Collapse of TerraUSD and Luna
Do Kwon, a South Korean national and co‑founder of Singapore‑based Terraform Labs, was behind the creation of TerraUSD and Luna digital coins. Both collapsed in 2022, wiping out an estimated $40 billion in investor wealth. Prosecutors argued that Kwon misled investors by claiming TerraUSD was a stablecoin designed to maintain parity with the US dollar.
Misleading Investors
Court documents revealed that when TerraUSD fell below its $1 peg in May 2021, Kwon assured investors that an algorithm had restored its value. In reality, he secretly arranged for a trading firm to purchase millions of dollars’ worth of tokens to artificially inflate the price. Judge Engelmayer noted that Kwon, a Stanford graduate, repeatedly lied to those who trusted him with their money.
Guilty Plea and Regret
Kwon pleaded guilty in August to charges of fraud and conspiracy to commit wire fraud. Addressing the court, he expressed regret, saying he had spent “almost every waking moment of the past few years” reflecting on what he could have done differently and how he might repair the damage.
Significance of the Case
BBC Urdu reports that the sentencing highlights the risks of unregulated digital currencies and marks one of the most high‑profile convictions in the crypto industry’s turbulent history. The case also underscores how misleading claims about stablecoins triggered one of the largest financial scandals in recent years