TerraUSD Creator Do Kwon Sentenced To 15 Years Over $40 Billion Crypto Collapse

An anonymous reader quotes a report from Reuters: Do Kwon, the South Korean cryptocurrency entrepreneur behind two digital currencies that lost an estimated $40 billion in 2022, was sentenced in New York federal court on Thursday to 15 years in prison for fraud and conspiracy. Kwon, 34, who co-founded Singapore-based Terraform Labs and developed the TerraUSD and Luna currencies, previously pleaded guilty and admitted to misleading investors about a coin that was supposed to maintain a steady price during periods of crypto market volatility.

Kwon was one of several cryptocurrency moguls to face federal charges after a slump in digital token prices in 2022 prompted the collapse of a number of companies. Kwon was accused of misleading investors in 2021 about TerraUSD, a so-called stablecoin designed to maintain a value of $1. Prosecutors alleged that when TerraUSD slipped below its $1 peg in May 2021, Kwon told investors a computer algorithm known as 'Terra Protocol' had restored the coin's value. Instead, Kwon arranged for a high-frequency trading firm to secretly buy millions of dollars of the token to artificially prop up its price, according to charging documents. 'I made false and misleading statements about why it regained its peg by failing to disclose a trading firm's role in restoring that peg,' Kwon said in court. 'What I did was wrong.'

He also faces charges in South Korea, and under his plea deal, prosecutors won't oppose his transfer abroad after he serves half of his U.S. sentence.

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