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Cryptocurrency giant Do Kwon will be sentenced on Thursday for misleading investors who lost billions of dollars when his company’s crypto ecosystem collapsed in 2022.
Kwon, known to some as the “Cryptocurrency King,” pleaded guilty manhattan in federal court in August on fraud charges stemming from Terraform Labs’ $40 billion crash.
The company had promoted its TerraUSD as a reliable “stablecoin” – a type of currency typically pegged to stable assets to prevent wild price swings. But prosecutors say it was all an illusion that fell apart, devastating investors and “triggering a series of crises in the cryptocurrency markets.”
Kwon, who is from south koreaAgreed to forfeit more than $19 million as part of plea deal.
While federal sentencing guidelines would recommend a prison sentence of approximately 25 years, prosecutors have asked the court to sentence Kwon to 12 years. They cited his guilty plea and said he would be tried further in Korea and that he had already served his sentence in Korea. montenegro While awaiting extradition.
“The scope of Kwon’s fraud was enormous, spanning nearly every aspect of Terraform’s purported business,” prosecutors wrote in a recent memo to the judge. “His massive lies left a trail of financial destruction in his wake.”
Kwon’s lawyers asked that the sentence not exceed five years, arguing in their memorandum that his conduct stemmed not from greed, but from arrogance and desperation.
In a letter to the judge, Kwon wrote, “I am solely responsible for everyone’s pain. The community looked to me to know the way, and I led them astray in my arrogance,” adding, “I made misrepresentations that came out of cruelty that are now a source of deep regret.”
Investors around the world lost money in the fall, officials said Singapore The crypto firm, which Kwon co-founded in 2018. After the stablecoin fell well below the $1 peg, approximately $40 billion in market value was lost for holders of TerraUSD and its floating sister currency Luna.
Kwon was extradited from Montenegro to the United States following his arrest on March 23, 2023, while traveling on a false passport. Europe,