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23 hours ago
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Do Kwon Sentenced to 15 Years for TerraUSD Fraud

Do Kwon, co-founder of Terraform Labs, was sentenced to 15 years in prison for fraud related to the collapse of TerraUSD and Luna. This case was heard in a Manhattan federal court, where he pleaded guilty to conspiracy to defraud and wire fraud.

Sentence and Court Ruling

  • Judge Paul A. Engelmayer imposed a 15-year sentence despite the prosecution's suggestion of up to 12 years.
  • Kwon agreed to forfeit approximately $19 million as part of his plea deal.
  • The US Attorney’s office confirmed that Kwon misled investors regarding the stablecoin's stability.

Scale of the Losses

  • The Terra collapse resulted in a market loss of about $40 billion.
  • Many investors lost their savings, with testimonies highlighting financial ruin.
  • The crash in May 2022 triggered a loss of confidence affecting other crypto firms.

Civil Penalties and Settlements

  • Kwon and Terraform faced a civil action from the SEC, resulting in over $4.5 billion in penalties.
  • Kwon was fined $80 million personally and banned from crypto trading.

International Arrest and Extradition

  • Kwon was arrested in Montenegro in March 2023 using forged documents.
  • After legal battles, he was extradited to the US in late 2024 for trial.

Implications of the Sentence

  • The 15-year sentence reflects the severe impact of the fraud and aims to deter future schemes.
  • Kwon may face further investigations and charges internationally.